The IRS investigates HSBC for tax evasion
Bob Moon: Let’s try a quick word association exercise. When I say “secret bank account,” what country comes to mind?
I’m guessing the most popular answer is likely to be Switzerland. If I mention “off-shore tax haven,” I’ll venture the survey says: The Cayman Islands.
Your thoughts probably didn’t turn right away to India. But today there’s word the IRS is investigating Indian-Americans for tax evasion. Here’s Marketplace’s Jeff Tyler.
Jeff Tyler: The IRS wants banking giant HSBC to share information about people evading taxes through accounts in India. In a statement, HSBC says it has complied with laws in all the countries where it operates. Clients, on the other hand, might not have declared bank accounts outside the U.S.
Gary Hufbauer: There’s a form you declare it on. And if you don’t declare it, you’ve already violated the law.
That’s Gary Hufbauer, senior fellow at the Peterson Institute for International Economics.
Hufbauer: Evasion is much, much more extensive outside the United States. I know in India and much of Latin America, the tax system is regarded as something you avoid, not something you pay.
He estimates that the alleged Indian-American tax evasion could be worth hundreds of millions of dollars — but not billions. Still, he says the IRS’s action is significant.
Hufbauer: I think we’re seeing a trend here and I expect it to grow.
After successfully going after the Swiss bank UBS, the Internal Revenue Service is expected to target other international banks.
I’m Jeff Tyler for Marketplace.
Stories You Might Like
We’re here to help you navigate this changed world and economy.
Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.
In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.
