In an effort to clamp offshore tax evasion, the U.S. authorities are investigating the U.S. clients of HSBC Holdings plc. (HBC). The clients in question are suspected not to have disclosed their accounts in India and Singapore, according to a Bloomberg report.
Bloomberg reported that the U.S. Justice Department has initiated a criminal investigation against the HSBC clients. Letters have been sent to the HSBC clients in the last month, asking them to provide the reason for not disclosing their accounts with the IRS or the Treasury Department.
This investigation against the HSBC clients is part of the U.S. crackdown on offshore tax evasion. U.S. citizens are believed to have made billions of dollars in assets by opening accounts outside the country to avoid taxes. It also shows that the U.S. authorities are looking beyond Switzerland and UBS AG (UBS).
The U.S. authorities already chalked out a deal last year following which the Switzerland-based UBS had agreed to disclose client details of around 4,500 customers by August this year. The clients were alleged to have evaded American taxes.
This deal got caught up in controversies and was finally solved last month, when the Swiss parliament voted in its favor. A number of Swiss parliamentarians had challenged the deal, arguing that it violated the country’s legendary bank secrecy. However, the IRS had threatened to pursue all legal options, if the Swiss government backtracked from providing the information by the August deadline. This approval also paves the way for similar deals of the U.S. government with other Swiss banks.
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