Yet another blow struck against financial freedom! The IRS is targeting US-based HSBC account holders, especially those with Indian backgrounds or Indians living in the USA! http://www.bbc.co.uk/news/business-13009687 " 8 April 2011 Last updated at 03:15 ETUS authorities are taking first steps towards an investigation into HSBC's alleged role in enabling tax evasion. The Department of Justice has asked a federal court to allow US tax authorities to demand personal account details of US taxpayers from the UK bank's Indian subsidiary. HSBC said it had not seen the summons but did not condone tax evasion. The investigation will focus on Indians living in the US, who have to pay US income tax on their worldwide income. The Department claims that HSBC India encouraged these non-resident Indians to set up accounts in India, which were then concealed from the Internal Revenue Service (IRS) in order to avoid paying income tax on the interest earned. "Prospective clients were told that, as a foreign bank, HSBC India would not disclose the accounts to the IRS." In response, HSBC said that it "does not condone tax evasion and fully supports the US efforts to promote appropriate payment of taxes". The court petition referred to a specific case of tax evasion that is already known to them. Vaibha Dahake of Somerset, New Jersey, has been charged with using undeclared bank accounts in the British Virgin Islands and at HSBC India to defraud the IRS. However, the requested "John Doe" summons would cover the accounts of any US taxpayers at HSBC in India, which the US tax authorities say have been hidden from them. It is the same strategy the US used to investigate Swiss bank UBS last year. "Our international efforts are not just about one country or one bank - it's about our wider effort to ensure compliance with the nation's tax laws," said Douglas Shulman, commissioner at the IRS. An intentional failure to report a foreign bank account can result in a penalty of up to 50% of the account's balance."