IMPEACH BUSH

WASHINGTON (AP) -- European bankers and some of their U.S. clients can expect a grilling from a Senate panel looking into offshore tax abuses that investigators believe are costing American taxpayers about $100 billion a year.

The questioning, expected at a hearing Thursday, follows the release of a report by the Senate panel accusing the banks of helping commit massive tax evasion and urging tougher laws to combat offshore tax havens around the world.

The 109-page report by the Senate Homeland Security and Governmental Affairs investigations subcommittee took aim specifically at Switzerland's UBS AG (UBS), among the world's largest wealth managers, and Liechtenstein's LGT group, owned by the principality's royal family.

Representatives from UBS and LGT were scheduled to testify, along with some of LGT's U.S. clients.

A federal judge ruled this month that the Internal Revenue Service could serve legal papers on UBS in an expanding probe of U.S. taxpayers who may have used overseas accounts to hide assets and avoid taxes. UBS has said it is cooperating with Swiss and American investigations and will disclose records involving U.S. clients who might have broken tax laws. It also has banned its Swiss bankers from traveling to the United States.

Investigations linked to LGT have been launched in a number of countries since German authorities in February obtained a CD-ROM of some 1,400 alleged tax cheats with accounts at the bank. Germany has since passed the file to other countries, including the United States.

U.S. taxpayers are required to report all their foreign financial accounts if the total value exceeds $10,000 at any point during the tax year. Failure to report the accounts can result in penalties of up to 50 percent of the amount in the accounts.

The subcommittee report said "UBS Swiss bankers targeted U.S. clients, traveled across the country in search of wealthy individuals and aggressively marketed their services to U.S. taxpayers who might otherwise never have opened Swiss accounts."

It said the bank's practices resulted in billions of dollars of U.S. taxpayer money in undeclared accounts that were not disclosed to the IRS. The report said UBS has estimated that it has 1,000 declared accounts in Switzerland for U.S. clients against 19,000 undeclared, with a combined value of $17.9 billion.

While UBS did not technically violate U.S. reporting requirements under the 2001 "qualified intermediary program," it actively assisted clients in structuring their Swiss accounts to avoid disclosure responsibilities with the IRS and thus aided tax evasion, the report said.

In Liechtenstein, the report said the royal family's LGT Group contributed to a "culture of secrecy and deception" that enabled clients to "evade U.S. taxes, dodge creditors and ignore court orders."