Expansion of Offshore Tax Evasion Investigations by IRS and Justice Department

The Department of Justice (DOJ) has announced that its investigation of offshore tax evasion will expand to include Europe's largest bank, HSBC in London, and Credit Suisse in Zurich. The increasing scrutiny of illegal offshore tax schemes comes as the Wall Street bailout and turmoil in the banking and financial services industries generate more interest in IRS Whistleblower Program claims.

DOJ and IRS continue to investigate UBS, Switzerland's largest bank. In late 2008, the government secured the unsealing of the an indictment of Raoul Weil, a UBS senior executive, who faces charges of conspiring to defraud the U.S. by concealing American clients' taxable assets.

Scrutiny of Credit Suisse and HSBC reportedly includes whether the two banks may have helped U.S. clients hide up to $30 billion from U.S. tax authorities.

The investigations into Bernard L. Madoff are also expanding into offshore tax havens as investigators believe that Mr. Madoff and some of his investors used funds based in offshore tax havens to evade American taxes

The penalties for taxpayer noncompliance include a fine of not more than $500,000 and imprisonment of not more than five years. Read more here.

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