WASHINGTON (AP) – UBS AG now says it had about 47,000 accounts held by Americans who didn’t pay U.S. taxes on their assets, but Switzerland’s biggest bank is providing the names of only 300 American clients to the U.S. government in a showdown over secrecy.

Lines were drawn in the burgeoning cross-border dispute at a hearing Wednesday by a Senate investigative panel.

A Justice Department official signaled that UBS could still be subject to criminal prosecution if terms aren’t met under the bank’s recent agreement with the U.S. government. A key senator, meanwhile, noted improving prospects, including the backing of President Barack Obama, for U.S. legislation to fight offshore tax-haven abuses.

“The rest of the world is getting fed up with offshore tax havens that turn a blind eye to tax evasion and allow their financial institutions … to profit from tax dodging,” said Sen. Carl Levin, D-Mich., chairman of the Senate Homeland Security and Governmental Affairs Committee.

Levin also voiced frustration with what he said were evasive answers to his questions from UBS executive Mark Branson, who confirmed the figure of around 47,000 accounts as of Sept. 30. That compares with UBS’ estimate in July of 19,000 U.S. clients with bank accounts.

UBS last month formally accepted responsibility for helping Americans hide assets from the U.S. government and agreed to pay $780 million in fines and restitution. The bank also turned over the names of about 300 U.S. clients. But UBS is not giving the Internal Revenue Service the names of all U.S. citizens who maintained secret accounts with the bank.

Branson said nearly all the accounts have been closed and that the bank “has now done all that it can do to cooperate” with the IRS request.

“UBS cannot disclose information to the IRS that would put its employees at serious risk of criminal prosecution under Swiss law,” said Branson, who is the chief financial officer of the bank’s global wealth management and Swiss bank division in Zurich.

IRS Commissioner Douglas Shulman told the hearing the Obama administration is “committed to taking aggressive action on offshore tax abuse.”

“We cannot allow an environment to develop where wealthy individuals can go offshore and avoid paying taxes with impunity,” Shulman said.

If UBS is found in contempt by a federal judge for refusing to identify the rest of its U.S. clients, the government could proceed with its criminal prosecution of the bank, which has been deferred, said John DiCicco, acting assistant attorney general in the Justice Department’s tax division.

UBS, meanwhile, announced that former Swiss President Kaspar Villiger will replace Peter Kurer as chairman of the bank’s board next month in an effort to restore its profitability and deal with the growing controversy over the U.S. tax issue.

The bank has been staggering under massive losses stemming from the U.S. subprime mortgage crisis, and the Swiss government has provided it financial support.

The IRS has been trying to pry from UBS the names of wealthy Americans who maintained secret accounts with the bank. UBS maintains that turning over the account names would violate Swiss privacy law and jeopardize its license to stay in business.

The Swiss government refused to send a representative to Wednesday’s hearing in protest of the IRS lawsuit against the bank.

Cloak-and-dagger tactics said to have been employed by UBS – coded language in internal e-mails and memos, foreign shell companies and phony charitable trusts, use of pay phones and foreign area codes and credit cards – were on display at the hearing.

UBS allegedly staged training sessions so that “client advisers” could travel frequently to the U.S. – on average 30 days a year each – to consult with secret U.S. customers without attracting the attention of tax agents or law enforcement officials. The advisers were told to rotate the hotels they stayed in and to “protect the banking secrecy” if they were questioned by any authorities, according to excerpts of UBS internal documents filed in the IRS suit and provided by the subcommittee.

The dispute has prompted heated debate in Switzerland over the country’s cherished banking secrecy, a tradition that has helped transform the nation into one of the world’s richest.

UBS on Feb. 18 formally acknowledged conspiring to help American citizens violate their country’s tax laws by hiding assets – estimated to be worth at least $14.8 billion – from the U.S. government. In the deal struck in federal court in Fort Lauderdale, Fla., the Justice Department agreed to defer criminal prosecution of UBS in exchange for the payment of fines and restitution, and the names of up to 300 U.S. clients.

The bank says it has shut down the improper foreign-account business, and taken corrective measures to tighten its compliance and internal control systems.

In its civil suit against UBS, the IRS has asked a federal judge to enforce so-called “John Doe summonses” seeking information about the Americans’ accounts. Another federal judge approved the summonses in July 2008, but UBS never complied.

The hearing was the latest in an extensive series by the Senate panel examining offshore tax abuse, which is estimated to cost the U.S. $100 billion a year in lost tax revenue.

Recovering tax revenue has taken on amplified urgency amid the economic crisis, when the federal deficit is expected to balloon to about $1.7 trillion, or nearly four times the highest level in history as hundreds of billions of dollars are spent on the bailout for financial institutions and the economic stimulus plan.

On Tuesday, Treasury Secretary Timothy Geithner said that Obama supported legislation authored by Levin that would tighten U.S. tax laws and close loopholes to fight offshore tax-haven abuses.