UBS, the embattled Swiss bank that is being forced to divulge the names of about 4,450 account holders to the IRS, may have inadvertently tipped its hand on their identities by sending them registered letters through the U.S. Postal Service.
The bank dispatched the letters to warn its U.S. customers that their account details may be revealed to the IRS, according to Reuters, which cited the Swiss newspaper Sonntag. UBS is supposed to send the list to the Swiss government, which will decide which names to pass along to the U.S. government. However, if the IRS teams up with the U.S. post office to trace the registered letters to their intended recipients, it may be able to discover a far larger set of account holders than the ones that the Swiss government ultimately decides to share with U.S. authorities.
According to IRS Commissioner Douglas Shulman, over 7,500 U.S. taxpayers have already come forward to take advantage of the IRSs voluntary disclosure program before the Oct. 15 deadline passed, reporting their holdings in offshore accounts such as those at UBS. While the deadline is gone now, older IRS voluntary disclosure programs are still in effect, and tax attorneys are still being contacted by clients who are thinking of confessing their accounts before the IRS finds them.
Now that the UBS account holder list may have leaked out prematurely, the IRS may be hearing from more potential taxpayers who believed their information would not be divulged by the Swiss government.