Swiss court delivers blow to US tax dealSubmitted by meekandmild on Wed, 04/11/2012 - 10:24
GENEVA (AP) — Talks to resolve a long-running spat between Switzerland and the United States over how to pursue suspected tax evaders suffered a blow Wednesday, when a Swiss court blocked the handover of one unnamed bank client's data to U.S. authorities.
The Federal Administrative Court said a 1996 treaty between Switzerland and the United States doesn't allow the U.S. Internal Revenue Service to request the account details of potential tax cheats without clear evidence of fraudulent intent.
Drawing on Switzerland's distinction between evasion and fraud, the court said evidence of tax evasion, such as failure to declare a Swiss bank account, didn't provide sufficient grounds for the IRS to receive the data. It also criticized the fact that the IRS didn't specifically name the suspected tax cheat in their information request.