Q+A-What's at stake in the U.S. tax row against UBS?

ZURICH, July 28 (Reuters) - Alan Gold, the U.S. judge presiding over an tax trial against Switzerland's UBS (UBSN.VX)(UBS.N), will hold a status call at 1245 GMT on July 29 in which the Justice Department and the Swiss bank are due to advise him about progress towards a settlement of the damaging tax dispute.

On July 12, the United States and Switzerland agreed to seek an out-of-court settlement. Judge Gold has suspended the trial until Aug. 3 to allow the two governments to hammer out a deal. The judge could further extend the deadline.[ID:nLD512868]

Below are key questions and answers on the UBS case:

WHAT IS THE AT THE HEART OF THE TAX DISPUTE AGAINST UBS?

As it fights tax cheats, the U.S. Internal Revenue Service has ordered UBS to disclose the identities of 52,000 U.S. clients suspected of having used secret Swiss accounts to dodge taxes. The request is called a "John Doe summons" as the IRS does not know the clients' identities. [ID:nN19534438]

WHY IS UBS RESISTING HANDING OVER THE CLIENT NAMES?

Swiss privacy laws prevent UBS from handing bank client data to foreign authorities unless the request is very specific and relates to tax fraud. UBS, backed by the Swiss government, have said the blanket U.S. request is a "fishing expedition" for names not covered by current bilateral tax agreements.

HAS UBS EVER HANDED OVER DATA TO THE UNITED STATES?

Yes. UBS agreed to pay $780 million in February to settle criminal charges it was facing under a separate but related tax dispute.

It agreed to hand over data related to around 250 U.S. clients who had secret Swiss accounts and promised to exit its offshore business to U.S. clients.

Berne stretched bank laws to the limit to pass on the data without a formal violation of Swiss law, but tax lawyers said the case was a serious hit to traditional Swiss bank secrecy.[ID:nLJ532056]

WHAT WOULD A SETTLEMENT LOOK LIKE?

The settlement is expected to involve the transfer of a sizeable amount of UBS client data to the IRS. Christoph Bandli, head of the Swiss federal administrative court has told Reuters the IRS could request anonymous data related to a specific category of clients.

Swiss weekly SonntagsZeitung said the IRS would get 10,000 names of clients who had been visited by UBS bankers in America. The deal will most likely not formally breach the already weakened Swiss bank secrecy laws.

A settlement may also involve some payment by UBS, although the focus of the discussions are the client names.

WHY IS THIS LITIGATION IMPORTANT?

The U.S. tax dispute is testing the resilience of Swiss bank secrecy and is being closely watched by the multi-trillion dollar global offshore banking industry, which is also coming under pressure by G20 nations seeking to hunt down tax money in offshore centres.

UBS and other Swiss banks are already forcing U.S. clients to declare themselves to the IRS or leave the bank. European governments, who also need to raise tax revenues at a time of crisis, are also watching the case.

The IRS has also said it was preparing to pursue other non-U.S. banks. [ID:nN27438729] (Writing by Lisa Jucca; Editing by Rupert Winchester)