Igor S. Drabkin, J.D., Former IRS Attorney

Recent news that an ex-employee of HSBC Holdings stole tens of thousands of its Swiss accounts is likely to give U.S. tax authorities new clues in their fight against offshore tax evaders.  On March 11, 2010, HSBC said that theft by a former employee involved data on up to 24,000 Swiss client accounts.  This information has wound up in the hands of tax authorities in France, where the ex-worker fled.  The accounts were from a list of international clients.  U.S. tax authorities may be negotiating with the French through a treaty request to get the names of any HSBC U.S. clients from that list.  That would provide leads as the IRS  and Department of Justice seek tax evasion prosecutions which expand beyond the UBS affair, which we have previously written about.  As have been reported, tense negotiations to settle the U.S. government’s civil case against UBS dragged on for nearly a year before a deal was struck in which UBS agreed to hand over 4,450 account names last year.

There is precedent for the sharing of tax information among countries. Germany paid for data stolen from Liechtenstein’s top bank, LGT, in 2008. That data is believed to have wound up in U.S. hands.  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.

If you have HSBC or other foreign accounts, please contact us at (310) 550-6200.  Former IRS Attorneys of Holtz, Slavett & Drabkin can assist you with resolving your tax problems.

Author: Igor S. Drabkin, J.D., Former IRS Attorney.

Copyright (c) 2010 Igor S. Drabkin.  All Rights Reserved.