Tags: tax | offshore | banks | IRS

IRS Pursuing 'John Doe' Offshore Tax Evaders

By Michelle Smith   |   Wednesday, 13 Nov 2013 11:11 AM

U.S. authorities are going to the extra mile and employing special measures to uncover overseas tax evasion.

Prosecutors want the identities and account data of Americans holding accounts at Switzerland's Zurcher Kantonalbank (ZKB) and Bermuda-based N.T. Butterfield & Son, USA Today reported.

Those banks do not have U.S. operations, placing them beyond the direct reach of U.S. authorities. But authorities believe they may have an indirect route of getting the desired information. The two foreign banks are believed to have rendered services to American clients using correspondent accounts at banks that operate in the United States.

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To pursue that trail, the IRS has obtained special summonses to get information from Bank of New York Mellon, Citibank, JPMorgan Chase, HSBC and Bank of America, where the correspondent accounts may have been held.

With federal authorization to use special John Doe summonses, the IRS can request information from these banks without knowing the identity of the subjects its pursuing.

Earlier this month, after authorities filed the request for John Doe summonses in connection with ZKB correspondent accounts, Jeffrey Neiman, a former federal prosecutor involved in Swiss bank investigations, explained the procedure.

"What the U.S. is trying to do is figure out who accessed their undeclared Swiss bank account money, and did anyone access it in a way that flowed through US banks," he told Reuters.

"These John Doe summonses will provide information about individuals using financial institutions from Switzerland to the Cayman Islands to Hong Kong to avoid their U.S. tax obligations," Assistant U.S. Attorney General Kathryn Keneally, told USA Today of the government's expectations.

This not the first time the measures have been used to pursue tax evaders. According to Reuters, the IRS got permission to serve John Doe summonses on Wells Fargo in April.

And USA Today noted the special measures were also used to obtain information from Swiss bank UBS in 2009. In addition to divulging information on over 4,000 Americans, UBS also reportedly paid a $780 million fine for aiding U.S. citizens with schemes to evade taxes.

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