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IRS Summons Wells Fargo to Release Information on Americans with Foreign Accounts
Author: Scarinci Hollenbeck, LLC
Date: May 15, 2013
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A federal court in San Francisco has authorized the Internal Revenue Service to issue a John Doe summons to Wells Fargo for information on Americans with Foreign accounts at Canadian Imperial Bank of Commerce FirstCaribbean International Bank (FCIB).
The FCIB is based in Barbados, has 18 branches in the Caribbean, according to Forbes. However, the institution holds a correspondent account through Wells Fargo, giving the IRS authority to monitor transactions, particularly in cases of potential wrongdoing. Senior District Judge Thelton Henderson signed the order, which will allow the IRS to identify U.S. taxpayers with accounts at the FCIB that were held from January 1, 2004, to December 31, 2012. A John Doe summons is generally used by the IRS to obtain information about possible federal tax law violations by individuals whose identities are unknown, according to AccountingToday.
The IRS has claimed that an undisclosed number of U.S. taxpayers who hold accounts with FCIB are using the accounts to hide income and avoid compliance with U.S. tax laws, Forbes reports. However, more than 120 account holders have already come forward and enrolled in the voluntary disclosure program to avoid prosecution.
“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,” said Kathryn Keneally, assistant attorney general for the tax division of the Justice Department, AccountingToday reports. “Those who are still hiding should get right with their country and their fellow taxpayers before it is too late.”
The IRS has made sweeping efforts in recent years to detect Americans who evade taxes through the use of offshore accounts. While budget cuts may lower the number of audits for middle-income U.S. taxpayers, it is unlikely to affect efforts to curb tax law violations committed by wealthy Americans and corporate entities.
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