Caribbean bank accounts come under scrutiny of IRS

The Department of Justice has identified the bank as the Canadian Imperial Bank of Commerce First Caribbean International Bank (FCIB). It said the order was signed by Senior District Judge Thelton E. Henderson.

The Department of Justice said the IRS summons seeks records of FCIB’s United States correspondent account at the San Francisco-based bank, Wells Fargo N.A and that the summons will allow the IRS to identify US taxpayers who hold or held interests in financial accounts at FCIB and other financial institutions that used FCIB’s Wells Fargo correspondent account.

The Department of Justice said that, based on a petition filed by the government, the court granted the IRS permission to serve what is known as a “John Doe” summons on Wells Fargo.

“The IRS uses “John Doe” summonses to obtain information about possible violations of internal revenue laws by individuals whose identities are unknown,” the statement said.

According to the declaration of IRS Revenue, agent Cheryl R. Kiger filed in support of the petition, FCIB is based in Barbados and has branches in 18 Caribbean countries.

The declaration said that although FCIB does not have US branches, it maintains a correspondent account in the United States at Wells Fargo Bank N.A.

In the declaration, Kiger alleges the “IRS learned that US taxpayers were using FCIB to help them keep their offshore accounts undetected by the IRS and not to pay US federal income tax on money placed in those offshore accounts”.

The Justice Department said Kiger’s declaration describes her review of the information submitted by more than 120 FCIB customers who participated in the IRS’s Offshore Voluntary Disclosure Programme.

According to the Kiger declaration, many of the FCIB customers in the “John Doe” class “may have been under-reporting income, evading income taxes, or otherwise violating the internal revenue laws of the United States”.

Assistant Attorney General for the Justice Department’s Tax Division, Kathryn Keneally, said the Department of Justice and the IRS “are committed to global enforcement to stop the use of foreign bank accounts to evade US taxes.

“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.”

IRS Acting Commissioner, Steven T. Miller, said the summons “marks another milestone in international tax enforcement.

“Our work here shows our resolve to pursue these cases in all parts of the world, regardless of whether the person hiding money overseas chooses a bank with no offices on US soil,” he said.

The Department of Justice said the IRS currently has in place an Offshore Voluntary Disclosure Programme in which US taxpayers can come forward and disclose their offshore accounts and income.

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