MIAMI (Reuters) - UBS AG asked a U.S. court on Thursday to reject demands by U.S. tax authorities for confidential information about its American clients, saying disclosure would violate Switzerland's bank secrecy laws.
"The petition should be denied," Switzerland's largest bank said in a filing with a federal court in Florida.
The U.S. Internal Revenue Service is pursuing a civil lawsuit against UBS (UBSN.CH)seeking access to data on 52,000 wealthy Americans it says are hiding about $14.8 billion of assets in Swiss bank accounts.
"Despite the clear historical record, the IRS now asks this court to force a Swiss financial institution and its employees, over the express objection of the Swiss Government, to violate Swiss law by producing a massive quantity of confidential account information located exclusively in Switzerland," UBS said in its filing.
"The IRS asks this court to enforce against UBS a broad civil summons seeking information on many thousands of client accounts located exclusively in Switzerland, even though compliance would compel UBS employees to commit crimes in Switzerland," the bank added in its written argument.
UBS acknowledged in February that it helped U.S. clients conceal assets from their government. It agreed to pay a $780 million fine and has since identified about 320 of its American clients.
In the high-profile legal showdown with the Zurich bank, the IRS is employing a legal tool known as a John Doe summons, which allows it to investigate tax fraud by individuals whose identities are unknown because of bank secrecy.
Federal District Court Judge Alan Gold in Miami will determine whether the summons should be enforced. The case could set an important legal precedent, since UBS is the first foreign bank to be served with a John Doe summons.
The IRS has pushed ahead with its demand for enforcement at a time when political leaders in the United States and elsewhere, and even Pope Benedict, have called for a crackdown on secretive tax havens and offshore financial centers.
Switzerland, which is trying to defend its jealousy guarded tradition of bank secrecy, asked the United States last weekend to drop the case against UBS in exchange for a new tax accord with Washington.
(Reporting by Tom Brown and Jim Loney; Editing by Pascal Fletcher and Steve Orlofsky)