HSBC Leaked Documents Could Spur Further Crackdowns on Tax Evasion

Offshore Account Update, UBS / HSBC

Posted on May 8, 2015 |

Authorities are already convinced of the need to aggressively go after investors who may be hiding money offshore in order to avoid full compliance with tax obligations.  Estimates indicate that around $7.6 trillion in wealth is held in offshore accounts, depriving governments worldwide of around $200 billion in unpaid income tax revenue. 

Leaked documents from HSBC confirm the scope of global tax evasion and are only likely to spur further efforts by U.S. authorities to pursue actions against accountholders who have money offshore. If you have not complied with all IRS obligations related to your offshore accounts, you could find yourself the subject of an investigation and facing possible criminal charges and tax penalties.

It is best to act as soon as possible and identify voluntary disclosure programs and other ways you can limit the consequences of tax evasion. A New Jersey tax evasion attorney can help you to explore possible options.

HSBC Leaked Documents Demonstrate the Extent of Evasion

In 2010, a whistleblower gave French authorities documents from HSBC Bank showing how HSBC’s private bank helped investors hide funds from taxing authorities up through 2007.  The French authorities shared this information with other governments. 

The leaked documents had details on more than 100,000 account holders and legal entities. Some of these accounts belonged to drug traffickers and arms dealers who were involved in both tax evasion and money laundering.  Others belonged to celebrities and wealthy individuals who simply wanted a way to keep money offshore without paying all local taxes on their investment income. 

Accountholders whose information was included in the leaked documents came from more than 200 different countries and their collective accounts held more than $100 billion.

In response to the leaked documents, some questioned why governments had not done more to go after tax evaders. Most government authorities, however, are making an aggressive push to recover uncollected tax from offshore accountholders. France, for example, launched 103 actions and the British taxing authorities recovered more than $135 million pounds from people involved in tax evasion schemes at HSBC.

Because the leaked documents seem to show that the problem of tax evasion is massive in scale, and because the documents provide information on accountholders, they provide both a tool to taxing authorities as well as justification for continuing aggressive legal actions to fight against tax evaders.  HSBC was already fined by the United States in 2012 for facilitating money laundering and the Department of Justice and the Internal Revenue Service have continued to keep the pressure not just on HSBC but on other Swiss banks as well.

Investors should be worried about not just possible document leaks and whistleblowers coming forward, but also about banks and bankers making deals to save themselves by turning over customer information. If you have any money in offshore accounts that the IRS does not know about, you will want to act soon to figure out a way to address the potential legal problems you could face if the account is identified.  Contact Kevin Thorn at Thorn Law Group for help.


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