Court authorizes service of 'John Doe' summons on U.S. taxpayers with Caribbean offshore accounts

By Jessica M. Karmasek | May 2, 2013

WASHINGTON (Legal Newsline) -- The U.S. Department of Justice said Tuesday a federal court has entered an order authorizing the Internal Revenue Service to serve a "John Doe" summons on U.S. taxpayers who may hold offshore accounts at Canadian Imperial Bank of Commerce FirstCaribbean International Bank.

The order was signed by Senior District Judge Thelton E. Henderson of the U.S. District Court for the Northern District of California.

The IRS summons seeks records of FCIB's U.S. correspondent account at Wells Fargo N.A., which will allow the IRS to identify U.S. taxpayers who hold or held interests in financial accounts at FCIB and other financial institutions that used its Wells Fargo correspondent account.

A correspondent account is a bank deposit account maintained by one bank for another bank.

Pursuant to a petition filed by the federal government, the court granted the IRS permission to serve what is known as a "John Doe" summons on Wells Fargo.

The IRS uses such summonses to obtain information about possible violations of internal revenue laws by individuals whose identities are unknown.

This John Doe summons directs Wells Fargo to produce records identifying U.S. taxpayers with accounts at FCIB and other banks that used FCIB's correspondent account.

"The Department of Justice and the IRS are committed to global enforcement to stop the use of foreign bank accounts to evade U.S. taxes," Kathryn Keneally, assistant attorney general for the department's tax division, said in a statement.

"This John Doe summons is a visible indication of how we are using the many tools available to us to pursue this activity wherever it is occurring. Those who are still hiding should get right with their country and their fellow taxpayers before it is too late."

Federal tax law requires U.S. taxpayers to pay taxes on all income earned worldwide. U.S. taxpayers must also report foreign financial accounts if the total value of the accounts exceeds $10,000 at any time during the calendar year.

From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.

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