The US Government moved a step closer yesterday to ripping off the veil of secrecy that for centuries has protected the identity of UBS clients as a federal court took the unprecedented step of demanding that the Swiss bank hand over the names of as many as 20,000 of its customers.

A federal judge in Miami issued an order authorising the Internal Revenue Service (IRS) to retrieve from UBS information about US taxpayers who may be using Swiss accounts to evade income taxes.

The order, signed by Judge Joan Lenard and announced after the markets closed, directs UBS to produce records identifying US taxpayers with accounts in Switzerland who have elected to have their accounts remain hidden from the IRS. The US Government’s Justice Department believes that as many as 10,000 UBS customers collectively have about $20 billion of assets in “undeclared” accounts and that the bank has helped them to avoid about $300 million in taxes.

The law requires a US taxpayer to report all financial accounts in a foreign country if the total value of the accounts exceeds $10,000. Failure to report a foreign account can lead to a penalty of up to 50 per cent of the amount in the account at the time of the violation.This is the first time that the US courts have authorised such a request over a foreign bank and the move could put it on a collision course with the authorities in Switzerland, where it is illegal for banks to disclose confidential information without client approval.

UBS said that it would work closely with the IRS to address the summons but suggested that the release of the names was still not a foregone conclusion because of the need to comply with Swiss law.

In a statement, the bank said: “UBS takes this matter very seriously and is working diligently with both Swiss and US government authorities, consistent with Swiss law and the legal frameworks for intergovernmental cooperation and assistance.”

Doug Shulman, the IRS commissioner, welcomed the ruling. He said: “The order clears the way for the IRS to take the next steps against wealthy individuals who don’t pay their taxes. People should take notice that the secrecy surrounding these accounts is rapidly fading.”

The move is a fresh blow for the bank, which has stumbled from crisis to crisis in recent months. UBS has sustained Europe’s greatest losses in the credit crunch, with more than $37 billion (£18.7 billion) of writedowns. Yesterday it reduced the power of its chairman and removed four long-time board directors after a review of its corporate governance.

At the same time, Daniel Zuber-bühler, the Swiss banking regulator, said that he intended to bring in more stringent capital rules by October for the country’s banks, which could limit the amount of investment business that they can do. Analysts expect UBS to reveal writedowns of SwFr4 billion (£1.9 billion) when it reports second-quarter results on August 12. The flurry of bad news sent UBS’s shares to a record low of SwFr19.90 £9.78) before they recovered to close down more than 5 per cent at SwFr20.30.

The Miami court’s ruling comes less than a fortnight after Bradley Birkenfeld, a former UBS banker, pleaded guilty to helping a UBS client — Igor Olenicoff, a property developer in California — to evade taxes.

UBS has been reviewing its operations since sustaining huge losses in the credit crunch. Yesterday, the bank said that it would scrap the chairman’s office, which previously had overseen the company’s strategy, compensation, risk management and succession planning. These roles will be handed to board committees.

Analysts at Dresdner Kleinwort have predicted that the bank will announce SwFr4 billion in further losses next month.

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive