UBS To Pay $780 Million Fine

UBS, the Swiss Bank accused by the IRS and Department of Justice of hiding taxpayers’ bank accounts from the IRS, has admitted to the act in a deferred prosecution agreement. UBS will provide a list of account holders to the DOJ and will pay $780 million in fines (including penalties and restitution).

Of the $780 million, $380 million is for a disgorgement of profits (on the US activity from 2001-2008), and $400 million is backup withholding tax on the accounts for 2001-2008. The SEC will receive $200 million of the $380 million of disgorged profits.

The IRS budget for 2008-2009 is $11.4 billion, so the total backup withholding recouped ($400 million) represents 3.5% of the IRS budget.

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