If the HSBC information is provided to the U.S., the IRS would gain valuable insight from reviewing the data. It would see what types of accounts were held, in what regions, and how HSBC’s Swiss banking operation worked. About 15,000 U.S. taxpayers with offshore accounts came forward under a voluntary amnesty program last year, giving authorities a trove of information with which to hunt. All this information is likely to give the IRS and the DOJ new leads for its continued efforts to go after offshore tax cheats.
Theft of Tax Data May Help U.S. Fight Tax Evasion
The next step in the IRS fight against offshore tax evasion may lead to the government’s use of stolen data. Tax data thefts at HSBC in Switzerland and other offshore banks are leading more whistleblowers to come forward to U.S. tax authorities, Kevin Downing, a top Department of Justice prosecutor said on March 5, 2010.
Switzerland will ask Parliament to turn a UBS deal with the U.S. (which provided for disclosure of 4,450 accounts and got UBS off the hook in a John Doe Summons case) into binding law. That would plug a legal hole that is stopping Berne from honoring the agreement. Our readers may recall that UBS and the Swiss government agreed in August of 2009 to disclose 4,450 secret accounts belonging to U.S. citizens. The settlement, however, hit a stumbling block after a Swiss court ruled in January of this year that such a transfer of data would breach existing Swiss law.
National Research Program (NRP) study on employment taxes will begin at the end of the month. The IRS will randomly select 2,000 taxpayers for employment tax examinations each year for the next three years. The examinations will be comprehensive in scope. Records pertaining to employment tax returns and issues will be subject to review during the examinations.
The January 22nd decision casts doubt on whether Switzerland could hand over the accounts of people who did not give proper documentation, but did not act fraudulently. Nevertheless, U.S. tax authorities said they expect the Swiss to honor the terms of that deal. The Swiss cabinet is supposed to discuss this week how to ensure the implementation of the Swiss-U.S. tax agreement following the court’s decision, it said in a statement. UBS said it had taken notice of the court’s decision but did not comment further.