For many, it’s not an easy choice.

To take advantage of the amnesty program — the second one it has offered, though the IRS says it will be the last — the US government is asking account holders to pay a steep penalty: 25 percent of the highest value of the account in recent years.

In exchange, they get to avoid prosecution, and to bring the remaining money home with a clean conscience.

In 2009, the IRS offered a similar amnesty program that brought in about 15,000 taxpayers. The government is convinced so many additional taxpayers are hiding accounts that it decided to offer the new program, with tougher penalties for people who, after all, have already had one chance to come clean.



Many of the holdouts may have assumed they were in the clear because most of the government’s investigation and most of the media attention focused on UBS accounts in Switzerland.



That bank became locked in a titanic battle with the US government over the identities of its secret clients after one banker went to the feds with details on thousands of accounts. (Below, read about that banker's experience and why he's now in prison.)

But just last week, the government opened a second front in its war on global bank secrecy, filing a so-called “John Doe summons” against HSBC on April 8 and demanding the names of US residents who may have been avoiding taxes with undisclosed accounts at HSBC in India.

In that case, the government alleged HSBC engaged in an elaborate effort to convince American residents of Indian descent to put money in the bank’s Indian branches. The government said the bank even opened “representative offices” in New York and Fremont, Calif., to work with those clients.

“HSBC does not condone tax evasion and fully supports the U.S. efforts to promote appropriate payment of taxes by US taxpayers,” said spokeswoman Juanita Gutierrez. “While complying with the law in all the jurisdictions in which it operates, including India, HSBC cooperates with requests from U.S. authorities.”

Lawyers involved say other banks are almost certainly in the government’s crosshairs.

The End of Bank Secrecy?

The massive government investigation may mean the end of global banking secrecy as it has been known for centuries.

“The global financial system is becoming increasingly transparent,” said Scott Michel, an attorney at the law firm Caplin & Drysdale, which represents about 450 clients with offshore accounts. “In my judgment it is getting harder and harder to hide money anywhere in the world.”