No. 11 C 4798, 2012 WL 2396866, (N.D. Ill. Jun. 21, 2012)
Over time, tax evasion has cost the United States government billions of dollars. Over the course of the last few decades, wealthy American citizens have exacerbated this problem by moving their assets to Swiss bank accounts. The appeal of storing assets in a Swiss bank account is clear, in part because Switzerland has enacted some of the strictest account holder privacy laws in the world. Failure on the part of a Swiss bank to protect the identities of their clientele can result in harsh fines and even imprisonment.4 As such, American citizens have used these accounts as “tax havens” to hide their assets from the government, and avoid paying income tax.
The recent case, Thomas v. UBS AG, dealt with the duties owed by Swiss banks to their American clientele in relation to these new regulations. In Thomas, the Plaintiffs claimed UBS acted negligently and in breach of its fiduciary duty by not supplying them with proper forms required by the QI Agreement with the IRS. Plaintiffs maintained that these forms would have alerted them of their income tax obligations, and enabled them to avoid withholding penalties. The United States District Court for the Northern District of Illinois, Eastern Division, dismissed all five causes of action alleged by the Plaintiffs against UBS, opining that a fiduciary duty did not exist between the parties with regard to the QI Agreements, and that the Plaintiffs failed to give UBS adequate notice of the claims against them.