American clients of UBS private bank are trying to cut a deal with US authorities to settle accusations that they hid assets in Switzerland in order to evade taxes, according to a report.

The wealthy Americans, who face exposure in a major US investigation into the Swiss banking industry, are applying for amnesty through the Internal Revenue Service (IRS) voluntary disclosure programme, reports The Wall Street Journal, citing people familiar with the matter.

The amnesty programme allows US citizens – 20,000 of whom are suspected of hiding money in UBS accounts – to admit tax evasion and pay penalties in return for immunity from criminal prosecution. People can only apply for amnesty before the IRS begins a specific investigation into their affairs. The report did not specify how many UBS customers had come forward.

The impetus to settle has increased as talks between the US and Swiss Governments over a controversial agreement in which Switzerland will release confidential data about American clients have intensified, according to the report.

The Swiss Government, which is under huge pressure as the US investigates its largest bank, has already agreed to release select information in contravention of its tradition of banking secrecy.

On Friday, a US client issued a lawsuit in Switzerland attempting to block the transfer of information but the case may take several weeks to reach court and be overtaken by events.

Current deals between US citizens and the taxman are being negotiated individually, The Wall Street Journal said, but the IRS is considering implementing a group settlement for all 20,000 clients who it beleives have a combined $20 billion in Swiss accounts.

A group settlement is attractive to the IRS because it does not have the resources to pursue each of the 20,000 Americans individually and it would also obviate the need to obtain confidential information from Switzerland.

Such a move would also be attractive to the Swiss whose future as the world’s premier location for private banking is at risk from the plan to divulge client details.

The IRS denied that any new amnesty was imminent.

UBS said it was continuing to cooperate with the US investigation adding that amnesty deals were a private matter between clients and the IRS.

Last week the pressure on UBS intensified when a member of the bank’s group executive board was charged with conspiring to evade taxes as part of the investigation.

Raoul Weil, 49, chairman and chief executive of global wealth management at UBS, is was indicted in a Florida court. Mr Weil, who has stepped down from his job, is believed to be in Switzerland, which does not typically extradite citizens to the US. He has denied the allegations.

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