“The Swiss do not want this to be litigated, and it is possible it will settle before then,” said the official.
Washington and Switzerland signed a new tax treaty Friday that would fight tax evasion by enhancing information sharing. But prosecutors are more likely to learn the identities of UBS clients after some filed legal papers in Swiss courts contesting the Justice Department’s names summons.
Swiss government officials are considering conveying these Swiss-based filings to the Justice Department as part of a deal in which the United States agency would drop the entire case, something that would allow Switzerland to say that it has not breached its own secrecy laws.
The Justice Department is already thinking of dropping the case because scores of wealthy clients, worried about being prosecuted, have come forward in recent months to declare their accounts. In addition, the agency would face a lengthy appeals process of up to three years if UBS appealed any adverse rulings by Judge Gold.
Of the 52,000 clients on the agency’s original list, prosecutors are focused on several thousand ultrawealthy Americans with offshore accounts containing from tens to hundreds of millions of dollars. Some 30,000 of the accounts are smaller, cash-only accounts, and many of those have been repatriated to American-based banks in recent months, the official said.
Adding to the pressure on UBS is a June 30 I.R.S. deadline requiring offshore banking clients to file certain disclosures, known as F-bars.
“If you look at the repatriations and F-bar filings and voluntary disclosures, and if these are big numbers, then it would make sense to settle this case,” said the official.
Karina Byrne, a UBS spokeswoman, and a Justice Department spokeswoman, Beverly Lumpkin, both declined to comment.