The financial crises, owing to the infringement of federal and state securities rules, hit

HSBC (NYSE:HSBC) in the year 2008; and these were settled in the year 2014 after six

years. This settlement cost HSBC (NYSE:HSBC) an estimated payment of $550 million

to the Federal Housing Finance Agency; however the major point of concern comes

with the question: how is HSBC (NYSE:HSBC) planning to pay for this? A study reveals

that most of the money written off by banks is being derived from taxpayers’ pockets.

About $192.5 million are being burdened onto the commoners in this case. HSBC

(NYSE:HSBC) can easily get away with it since FHFA does not really clarify the means

with which HSBC (NYSE:HSBC) pays for this compensation. HSBC (NYSE:HSBC) has

very cleverly saved itself and reduced its damages from $1.6 billion to the current cost

and has also saved the bank from becoming a target to the open media in a trial that has

to start on September, 29.

Many of the consultants and specialists in the field of law and taxes are consistently

focusing on the fact that during such governmental settlements and compensations

the tax money should be kept in check. A layman paying for a self-adopted business

is something entirely different from the tax to be paid by the taxpayers by law. When

it comes down to GST applied during business transactions, it is 100% verifiable and

authentic. On the other hand there is a lack of authenticity and non-verification when it

comes to government based fines and penalties on businesses.

The American Tax Law clearly protects the taxpayers’ money from being deducted

unlawfully as stated under the section 162(f). Despite this law there are some

circumstances under which subtractions can be made from the money provided by the

common people in taxes.

Now people are slowly becoming aware that unlawful cuttings from their taxes results

when special clauses and unambiguous conditions are approved by the government.

Credit Suisse and BNPP are among the few organizations upon which these stipulations

have been applied and both of them were prohibited to claim any money from tax

deductions. Sometimes there is joint understanding between the organization being

sued and the governmental authorities. DOJ is in the habit of sometimes not revealing

the terms and conditions of the settlements being made, however steps are being taken

to make this information public by using the Truth in Settlements Act S.1898 such states

that secrecies can be exposed and made public.

This law very precisely states that the federal and government agencies and

organizations are bound to reveal the amount of tax that is being abstracted in any

agreement signed. The poll that was conducted by the U.S Public Interest Research

Group Education Fund, shows that the public greatly criticizes these tax settlements.

Until a proper law is passed, whatever the companies are subtracting from the tax

money does not have any illegitimate implications yet in spite of popular belief.

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