Last week the U.S. Justice Department asked a federal district court in San Francisco to…
Is HSBC the next UBS nightmare?
Last year, UBS Bank avoided prosecution by paying $780 million and admitting it helped Americans evade taxes. Last August, US Justice Department issued a summons against UBS that had sought to require the bank to disclose the names of as many as 52,000 wealthy American clients. UBS disclosed secret data to the IRS on more than 4,000 accounts. That prompted 18,000 Americans to reveal their secret offshore assets to tax authorities last year in a bid to avoid prosecution.
Now HSBC Bank appears to be targeted to possibly reveal names of its customers with foreign accounts. The US Justice Department is considering whether to serve a broad legal summons on HSBC to ascertain whether it sold tax-evasion services to wealthy American clients. The legal action was being considered as a federal indictment was announced last Wednesday of an affluent client of HSBC on charges of conspiracy to defraud the United States by keeping hidden bank accounts in India and the British Virgin Islands, an offshore tax haven, from about 2001 until this year.
It was not clear how many client names would be covered under a summons, which would have to be issued by the Internal Revenue Service and enforced by the Justice Department. A HSBC spokesperson predictably said “HSBC does not condone tax evasion and fully supports the U.S. efforts to promote appropriate payment of taxes by U.S. taxpayers.” Nonetheless, clients with a foreign HSBC account should be seriously concerned about disclosure of the account to the government, which could result in criminal prosecution and significant civil penalties.
Our law firm advises and aggressively defends taxpayers in voluntary disclosures of foreign accounts, tax matters, tax controversies and examinations.