UBS to Surrender 4,450 Client Names to IRS

While details of the settlement are still emerging, it is believed the agreement could ultimately yield the identity of as many 10,000 account holders. In addition to the accounts being turned over by UBS, another 5,000 names are expected to come through an IRS amnesty program ending Sept. 23 that would allow UBS clients to acknowledge unpaid income tax.

The settlement culminates a legal battle centering on the secrecy of the Swiss banking system that began in February when UBS, in response to a Justice Department investigation, admitted to participating "in a scheme to defraud the U.S." Zurich-based UBS agreed to pay $780 million and disclose the names of more than 250 clients who allegedly hid assets from the IRS. The agency then sued UBS for information on as many as 52,000 clients as part of an effort to narrow the nation's $345 billion tax gap.

"UBS is the tip of the iceberg," Asher Rubinstein, a partner at law firm Rubinstein & Rubinstein, told Bloomberg News. "The writing is on the wall and you won't be able to hide money from the IRS for much longer."

Under the settlement, UBS is not expected to pay a monetary fine, according to the Wall Street Journal. It is unclear how the bank and the Swiss government decided on which client names to turn over, according to the Journal, but lawyers involved in the case believe those who are being disclosed will be able to object in a Swiss tribunal.

One former UBS banker, Bradley Birkenfeld, has pled guilty to helping wealthy Americans evade taxes, but the likelihood of additional arrests is uncertain. At his guilty plea, Birkenfeld said UBS earned $200 million a year by managing $20 billion in assets and setting up tax shelters for clients in havens such as Panama and the British Virgin Islands, Bloomberg reported. He is scheduled to be sentenced on Friday.

Watch a reporter from the New York Times discuss the details of the settlement on the NewsHour Wednesday:

---- Compiled from wire reports and other media sources