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HSBC officially provides information on clients having accounts in India to the US Department of Justice and IRS

This post was written by Parag Patel, Esq. on February 29, 2012
Posted Under: Asset Protection Against Risks,Defending and Planning Against Taxes

HSBC this week publicly announced that it has provided available information in its possession to the US authorities probing whether any US-based client used accounts in HSBC India to evade federal income taxes.

In April 2011, HSBC Bank USA received summons from the Internal Revenue Service (IRS) asking the entity to produce records with respect to US-based clients of an HSBC group company in India.

“While the summons was withdrawn voluntarily, HSBC Bank USA has cooperated fully by providing responsive documents in its possession in the US to the US Internal Revenue Service, and engaging in efforts to resolve these matters,” HSBC said on Monday while announcing its annual results.

According to HSBC, it continues to co-operate in ongoing investigations by the US Department of Justice and IRS regarding whether certain “group companies acted appropriately in relation to certain customers who had US tax reporting requirements”.  In August 2011, HSBC informed its American clients having bank account in HSBC India that IRS has served a summons on the bank seeking information with regard to financial accounts of US persons maintained with its branches in India.

Last month, the Internal Revenue Service opened its Offshore Voluntary Disclosure Program (OVDP) to encourage more taxpayers with assets in undeclared foreign bank accounts to come forward.

The HSBC announcement should persuade offshore accountholders who cannot decide whether to disclose past foreign account noncompliance to enter the IRS’ Offshore Voluntary Disclosure Program (OVDP), which remains in effect today, for protection against civil (and criminal) penalties. In light of recent criminal indictments, quiet or no disclosures are not viable options for such individuals.

Our law office, which represents many taxpayers throughout the U.S. and around the world with undisclosed offshore accounts, believes that these recent developments and large penalties should encourage more U.S. taxpayers with undisclosed offshore accounts, especially held at HSBC, to come forward before the government contacts them. If the government contacts you, do not provide any information and seek competent legal assistance immediately.

Patel Law Offices is a law firm dedicated to helping clients resolve complicated tax, criminal tax, and international tax problems. Our firm assists (and defends) clients and their advisors to legally disclose (and legitimize) foreign accounts.

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