{"id":1228,"date":"2011-04-10T22:20:05","date_gmt":"2011-04-11T03:20:05","guid":{"rendered":"http:\/\/www.patellawoffices.com\/blog\/?p=403"},"modified":"2011-04-10T22:20:05","modified_gmt":"2011-04-11T03:20:05","slug":"irs-offshore-hsbc-indian-accounts","status":"publish","type":"post","link":"https:\/\/patellawoffices.com\/blog\/planning-for-tax-minimization\/irs-offshore-hsbc-indian-accounts\/","title":{"rendered":"IRS’ Takes Legal Action Against Offshore HSBC Indian Accounts"},"content":{"rendered":"

Last week the U.S. Justice Department asked a federal district court in San Francisco to force HSBC USA to disclose the names of their U.S. customers suspected of having secret bank accounts in India.\u00a0 The legal action comes after the indictment of a New Jersey Indian American businessman <\/a>in hiding his bank accounts in India from the Internal Revenue Service.\u00a0Our law firm predicted possible disclosure of HSBC account holders’ names almost three months ago<\/a>.<\/p>\n

 <\/p>\n

The government filed a petition with the court to allow the IRS to serve what is known as a \u201cJohn Doe\u201d summons on the bank.\u00a0\u00a0 John Doe summons are used by the IRS to obtain information about possible tax fraud by those whose identities are unknown.\u00a0\u00a0 If approved, the John Doe summons would direct HSBC USA to produce records identifying U.S. taxpayers with accounts at HSBC India.\u00a0 In court documents, the U.S. Justice Department alleged that HSBC bankers solicited prospective clients, promising that, as a foreign bank, HSBC\u2019s India wouldn\u2019t disclose their accounts to the Internal Revenue Service.\u00a0 According to the government, thousands of U.S. taxpayers have opened bank accounts with HSBC India since 2002.<\/p>\n

Federal law requires U.S. taxpayers to pay federal income taxes on all income earned worldwide. U.S. taxpayers must also report foreign financial accounts if the total value of the accounts exceeds $10,000 at any time during the calendar year. A willful failure to report a foreign account can result in a penalty of up to 50 percent of the amount in the account at the time of the violation.<\/p>\n

The new summons by the IRS and Department of Justice opens up a new chapter in the U.S. crackdown on tax evasion.\u00a0 Previous cases focused on Americans with Swiss bank accounts, the most notable of which was the John Doe summons case against UBS.<\/p>\n

In February, the IRS announced a new amnesty initiative called the Offshore Voluntary Disclosure Initiative (OVDI)<\/a> for the taxpayers with hidden offshore accounts.\u00a0 The program offers taxpayers who voluntarily come forward protection from criminal prosecution for tax evasion.\u00a0 The program will require individuals to pay a penalty of 25% of the amount in their foreign bank accounts in the year with the highest aggregate account balance over eight years from 2003 through 2010.\u00a0\u00a0 The taxpayers will also be required to amend their tax returns, and pay back taxes and interest, as well as accuracy-related penalties.\u00a0 Under the regular FBAR rules, a taxpayer could pay up to 50% of the highest amount in each account for each year over six years.
\nHSBC will likely cooperate with the IRS and release all Indian American account holders’ names for which the IRS is seeking information, much like UBS did with the IRS back in 2008.\u00a0 It is recommended that such individual immediately seek legal assistance to minimize their risk of complications.<\/p>\n

For additional information, contact Parag Patel of Patel Law Offices at 732-623-9800 or visit us at www.PatelLawOffices.com<\/a>.\u00a0 Patel Law Offices is a law firm dedicated to helping clients resolve complicated tax, criminal tax, and international tax problems.<\/p>\n","protected":false},"excerpt":{"rendered":"

Last week the U.S. Justice Department asked a federal district court in San Francisco to force HSBC USA to disclose the names of their U.S. customers suspected of having secret bank accounts in India.\u00a0 The legal action comes after the indictment of a New Jersey Indian American businessman in hiding his bank accounts in India […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_daextam_enable_autolinks":"","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[1],"tags":[24,55,52,54,42,56,57,27],"class_list":["post-1228","post","type-post","status-publish","format-standard","hentry","category-planning-for-tax-minimization","tag-foreign-account","tag-hsbc","tag-offshore","tag-offshore-accounts","tag-tax","tag-tax-crime","tag-ubs","tag-voluntary-disclosure"],"_links":{"self":[{"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/posts\/1228","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/comments?post=1228"}],"version-history":[{"count":0,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/posts\/1228\/revisions"}],"wp:attachment":[{"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/media?parent=1228"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/categories?post=1228"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/tags?post=1228"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}