US tax crackdown extends to residents with Indian ties

In a crackdown on offshore tax evasion, American authorities
have begun a criminal probe into HSBC individual account holders, who may not
have disclosed their accounts in India. Indian Finance Ministry officials
admitted that authorities in New Delhi “must have passed on the information to
their US counterparts as part of bilateral or multilateral agreements”. It was
reported that the US Justice Department has initiated a criminal investigation
of HSBC Holdings’ clients who may have failed to disclose their accounts in
India or Singapore to the US Internal Revenue Service (IRS). “The information
about the accounts is unlikely to have come from the HSBC Bank and is also very
unlikely that US authorities or its agencies would have gone fishing for the
individual accounts which are outside their country,” he said. In India, the
financial information is gathered by different authorities such as Reserve Bank
of India, various banks, Financial Intelligence Unit and the Income-tax
Department. “It is possible that one of these authorities passed on the
information about the bank accounts of foreigners in India to the US IRS under
an exchange of information programme,” the official said. In the US, it is
obligatory for any citizen to provide details regarding any financial
transaction he or she may have carried out overseas.