HSBC appears to be the next target of U.S. government in its fight against offshore tax evasion. On June 21, 2010, the Department of Justice issued letters to HSBC clients informing them that they are subject to a criminal investigation. The letter did not mention HSBC by name by stated that the DOJ had “reason to believe” the person had an interest in a foreign account that wasn’t reported to the Internal Revenue Service on either a tax return or a special tax form used to report foreign accounts. ” The letters were signed by Kevin Downing, a senior Justice Department litigator, who also oversaw the UBS investigation.
Based on some calls received from potential clients, there is a reason to believe that at this stage the investigation focuses on HSBC accounts in India, Hong Kong and Singapore, but it’s likely that the probe will expand in scope. A wide-ranging investigation by the IRS and Department of Justice into UBS accounts in Switzerland has gained a lot of publicity in the past year, but the U.S. government has been indicating for a while that they intend to go beyond UBS and Switzerland in its effort to investigate undeclared offshore accounts. It appears that HSBC is the next step in the U.S. fight against offshore tax evasion.
Copyright (c) 2010 Igor S. Drabkin. All Rights Reserved.