HSBC has said in a regulatory filing yesterday that it is cooperating with US Department of Justice and the Internal Revenue System (IRS) in their investigations on whether HSBC companies and employees played a role in tax evasion by some of the customers.

HSBC has hinted that it expects heavy penalties for the involvement of its Indian unit in tax evasion by some of the US based Indian origin customers. The US tax department is looking investigation if American residents of Indian origin with accounts with HSBC India were involved in evading US taxes.

The UK-based HSBC made the disclosure as part of on-going regulatory and law enforcement investigations. It said that HSBC Bank USA had received a 'John Doe' summons from the IRS in April 2011 for providing records of US-based clients of an HSBC Group company in India. The 'John Doe' summons is issued to third parties for obtaining information on an unnamed, unknown taxpayer with potential tax liability by the IRS.

The bank had also received a subpoena from the US markets regulator SEC for providing information on HSBC Private Bank Suisse SA's cross-border policies and procedures and if the polices complied with broker-dealer and investment adviser rules and regulations related to US residents.