My July 11th “Asset Search News Roundup” mentioned that U.S. prosecutors were investigating HSBC since some U.S. taxpayers were suspected of using foreign HSBC bank accounts to facilitate tax frauds. Swiss prosecutors meanwhile, are separately investigating whether former HSBC employees Hervé Falciani and Georgina Mikhael had illegally accessed bank customer information at HSBC in Geneva.
According to a July 9th Bloomberg.com article, the two former HSBC employees may have violated Swiss bank secrecy laws by allegedly trying to sell confidential HSBC bank customer information. This information reportedly included the names of thousands of HSBC customers who might have used foreign HSBC bank accounts to hide assets from domestic tax authorities across the globe.
Furthermore, approximately 1500 of these HSBC customers may have hidden assets from the IRS in their foreign HSBC accounts. What might the IRS do to elicit financial evidence from HSBC, regarding these 1500 suspected tax cheats? As explained at “Concentrating On Assets Concealed By Cross-Border Elements“, one way the IRS can try to gather foreign evidence is by serving a “John Doe” summons.
If the IRS does serve HSBC with a “John Doe” summons, the IRS would conceivably gather financial evidence about the 1500 and other suspected tax cheats. The IRS has relied heavily on “John Doe” summonses as a countermeasure against tax frauds with cross-border elements. As of December 2008, the IRS had issued more than 150 “John Doe” summonses in connection with its Offshore Credit Card Program.
Copyright 2010 Fred L. Abrams