WASHINGTON (MarketWatch) - Thousands of Americans who thought they had a secret Swiss bank account will have their names and account details given to the U.S. Internal Revenue Services under an agreement announced Wednesday among U.S. and Swiss authorities and the Swiss bank UBS.

The IRS said Americans would no longer be able to evade taxes so easily by hiding their assets in offshore accounts.

The agreement comes as U.S. tax authorities conduct a criminal investigation into Americans who used Swiss bank accounts at UBS AG UBS, +1.40% (UBSN) to avoid paying U.S. taxes.

The settlement follows demands from the U.S. authorities that the bank hand over details on more than 50,000 customers. According to the settlement, U.S. tax authorities will gain access to 4,450 accounts of Americans who have accounts with UBS, and will drop a lawsuit against UBS in federal court demanding the names.

However, the agency expects to have access to hundreds of additional accounts through other agreements. An IRS official said the total number of names disclosed could be in the "high 5,000s."

"Wealthy Americans who have hidden their money offshore will find themselves in a jam," said IRS Commissioner Douglas Shulman. "You can expect us to continue to be aggressive with institutions that are helping Americans avoid taxes."

U.S. authorities are building criminal tax-evasion cases against more than 150 Americans who held accounts with UBS. He added that the accounts considered as part of the settlement held over $18 billion at one point.

“ 'The days of hiding an asset overseas are days that clearly are eroding.' ” — Douglas Shulman, IRS commissioner

UBS will hand over the 4,450 names and accounts to the Swiss Federal Tax Administration, which will then hand those over to the IRS. The Swiss regulator will decide which accounts should be disclosed to U.S. tax authorities.

A U.S. citizen can choose to appeal the case in a Swiss administrative court. The UBS clients are expected to receive notices in the mail in the next few weeks.

It could take months for the information to come to the IRS, an agency official said.

However, Shulman pointed out that the settlement represented a major improvement in the U.S. government's ability to gain access to information about U.S. tax avoiders.

"We started the negotiations at a point when the Swiss government took the position that we could not get access to the information, so we felt we needed to go through a U.S. court process to proceed," Shulman said. "About a month ago that posture changed. The Swiss government came to us and said they wanted to negotiate. Now, the Swiss government has said they have every reason to believe we will get access to these accounts."

Anthony Sabino, professor of law and business at St. John's University in New York, said the agreement represents a "new era in international law enforcement," because for the first time the Swiss government is willing to bend their "ultra-secret" bank secrecy laws.

"If the Swiss government cooperates on UBS, it will cooperate on other Swiss banks," Sabino said. "The pressure has been building against the damn for years, and now you're going to see a flood of information coming out. It is a signal that as capital moves with light speed over national borders, tax agencies and other governmental authorities will not be far behind."

UBS Chairman Kaspar Villiger said in a statement that the settlement helps resolve one of the Swiss bank's most pressing issues.

"I am confident that the agreement will allow the bank to continue moving forward to rebuild its reputation through solid performance and client service," he said.

Hand over the information -- voluntarily

Shulman pointed out that U.S. citizens have until Sept. 23 to voluntarily disclose their tax-avoidance or face "stiffer civil or possible criminal" charges. He added that U.S. citizens with hidden UBS accounts can still voluntarily disclose their account information to U.S. tax authorities before the deadline even if they previously received a notice from the Swiss bank. He added that bank notices will be sent out in stages and many letters may not be received by account holders until after the Sept. 23 voluntary deadline.

"The IRS will receive a significant portion of the account information after the Sept. 23 cutoff," Shulman said.

The accounts have a variety of holdings including precious metals and other securities. Some are off-shore "sham trust accounts," Shulman said.

St. John's University's Sabino pointed out that the voluntary program gives the tax-avoiders amnesty if they agree to a program to pay the back taxes they owe the U.S. government. However, if the tax-avoiders do not voluntarily disclose the information they can face jail time.

"If you don't come clean, the IRS won't be interested in just money, though they'll take that," Sabino said. "They'll be interested in criminal prosecution."

He added that U.S. citizens with undeclared UBS accounts will be "burning up the phone lines" with their expensive tax and white collar crime attorneys.

"If they can figure out some sort of payment scheme with the IRS they'll do that rather than face the possibility of going to jail," Sabino said.

Shahzad Malik, a tax attorney at TroyGould in Los Angeles, said he believes many U.S. residents will start coming forward on their own.

"This is simply unprecedented for an apparent turn-over in names by a Swiss bank," Malik said. "We may see a massive number of U.S. people who will now come forward voluntarily and negotiate a deal before the IRS locates them."

UBS has already handed over details on about 250 customers and paid fines of $780 million. But it has also been facing a further demand from tax authorities that it provide details on 52,000 other U.S. clients who may have been involved in tax evasion.

More banks identified

Shulman said he would not divulge whether the IRS has other investigations open, but the agency is receiving a lot of leads from the agency disclosure program.

"The days of hiding an asset overseas are days that clearly are eroding," Shulman said.

As well as the investigations over UBS, wealthy American citizens who have come forward under a tax-evasion amnesty program have identified other Swiss and European banks where their accounts are held, The Wall Street Journal reported.

Among the banks named in the voluntary disclosures are Credit Suisse Group CS, +1.52% (CSGN), Julius Baer Holding (BAER) and Union Bancaire Privee, the report said.

The disclosures aren't a signal of wrongdoing -- merely that a U.S. citizen keeps money at these banks -- and also don't indicate that other banks mirrored UBS' activities, including creating complex structures to help clients evade taxes, the Journal reported.