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(Corrects in para 7 to clarify comment is from Lonnie Frisby, aspokesman for HSBC)
* Swiss intend to hand over HSBC Swiss account info to IRS
* IRS, DOJ probe tax evasion by wealthy US citizens
* HSBC in Switzerland has acknowledged substandardcompliance
By John Miller
ZURICH, July 26 (Reuters) - Switzerland said it plans togive information to U.S. tax authorities about accounts at HSBCHoldings Plc's Swiss private bank, as part of a U.S.investigation into tax evasion.
HSBC's Swiss unit has already paid tens of millions ofdollars in fines after admitting substandard compliance on taxevasion and other issues.
The Swiss government said it made the announcement about itsplans on Tuesday to alert HSBC account holders whom it has beenunable to locate, and to give them the chance to lodge a legalappeal if they object to having their information sent to theU.S. Internal Revenue Service (IRS).
The move comes after the IRS asked Swiss tax authorities inApril for assistance on HSBC Private Bank (Suisse) SA accountsheld by Swiss-registered "domiciliary companies" with U.S.beneficial owners between 2002 and 2014.
The Swiss Federal Tax Administration said the IRS targetedHSBC accounts "where there is evidence that the U.S. beneficialowner exercised control, directly or indirectly, over theaccount in violation of corporate governance ... by withdrawingfunds from the account for personal use."
HSBC said it was cooperating.
"Following an information request in April 2016 from U.S.authorities to the Swiss Federal Tax Administration (SFTA), thebank has provided certain files, mostly related to formerclients, to the SFTA," said Lonnie Frisby, a spokesman forHSBC's Swiss private bank. "The Swiss authorities may forwardpart or all of this information to U.S. authorities inaccordance with applicable laws and treaties. Anyone subject tothis request has been notified."
The U.S. Department of Justice is also investigatingBritain-based HSBC over its Swiss unit's role in helping wealthyU.S. citizens evade taxes.
A spokesman for Switzerland's tax agency in Berne declinedon Tuesday to say how many HSBC accounts were involved in theIRS request, citing Swiss privacy laws.
No account holders were named in the Swiss notice. Thenotice indicated the IRS was seeking details of accounts inexcess of $50,000 where there were discrepancies on tax formsmeant to help the IRS determine who could benefit from theaccounts.
POSSIBLE APPEALS
With Tuesday's formal notification in Switzerland, HSBCaccount holders now have 30 days to lodge an appeal.
Such appeals would be handled by Swiss courts.
Switzerland's announcement that it was moving to help theIRS with the HSBC accounts came as the country received anoverall rating of "largely compliant" in an international reviewof how well it shares information with other countries on taxmatters.
HSBC's Swiss unit has been in the spotlight since 2008 whena former IT worker fled Geneva with files alleged to showevidence of tax evasion by tens of thousands of clients. Frenchand Belgian authorities are also investigating possible taxfraud by account holders from those countries.
The group International Consortium of InvestigativeJournalists (ICIJ), which coordinated reporting on the leakeddocuments, said last year that a list of people who held HSBCaccounts in Switzerland included sports professionals, rockstars and Hollywood actors, as well as dictators and weaponsdealers. [http://tinyurl.com/hfds9v2]
Last year, HSBC acknowledged its Swiss subsidiary'sfailings, saying problems had emerged because the unit had notbeen fully integrated after its purchase in 1999.
In June 2015, the bank paid Geneva authorities 40 millionSwiss francs ($41 mln) to settle a money launderinginvestigation.
HSBC has said it has since implemented more rigorouscontrols and is cooperating with tax authorities. (Reporting by John Miller; Editing by Susan Fenton)
