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IRS eyes U.S. accounts at Caribbean bank

A woman walks out of an Internal Revenue Service office in New York April 18, 2011. Credit: Reuters/Lucas Jackson
(Reuters) - The Justice Department said on Tuesday that a federal court had authorized the Internal Revenue Service to seek information on U.S. taxpayers who may have accounts at Canadian Imperial Bank of Commerce FirstCaribbean International Bank (FCIB).

In a move resembling a recent IRS inquiry into Americans with Swiss bank accounts, the Justice Department said a court order would let the IRS serve a 'John Doe' summons seeking records of FCIB's U.S. correspondent account at Wells Fargo & Co. A correspondent account is a bank deposit account maintained by one bank for another bank.

The order would allow the IRS to identify U.S. taxpayers with "interests in financial accounts at FCIB and other financial institutions that used FCIB's Wells Fargo correspondent account," the Justice Department said in a statement.

"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 U.S. soil," IRS Acting Commissioner Steven Miller said in a statement.

A spokesman for Wells Fargo said the bank would "review the summons and respond as legally required."

An FCIB spokeswoman said the bank intended to "cooperate with authorities in accordance with the respective laws of all jurisdictions involved" and to comply with legal and regulatory requirements. The bank was working with Wells Fargo to understand the court order, she said in a prepared statement.

FCIB, based in Barbados, has branches in 18 Caribbean countries. According to its website, the bank was formed in 2002 by Britain's Barclays Bank and Canadian Imperial Bank of Commerce (CIBC). In 2006, CIBC became the bank's majority shareholder, according to the website.

CIBC did not immediately reply to requests for comment.

FCIB does not have U.S. branches but it has a correspondent account in the United States at Wells Fargo, Justice said.

The IRS uses 'John Doe' summonses to get information on possible tax law breakers 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 statement said.

In a declaration filed to the court, a senior IRS revenue agent said many 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.

The FCIB case stemmed from information from 129 customers of the Barbados bank and its predecessor banks who took part in an IRS voluntary disclosure program, the Justice Department said.

In a similar case in January 2013, a federal court allowed the IRS to serve a 'John Doe' summons on Switzerland's UBS AG, seeking records of Swiss bank Wegelin & Co.'s U.S. correspondent account at UBS.

That action was part of a wide-ranging U.S. government effort to crack down on tax avoidance by Americans.

Wegelin, Switzerland's oldest bank, in March agreed to pay nearly $58 million in penalties and said it would shut its doors after admitting to helping wealthy Americans evade taxes.

The serving of 'John Doe' summons on correspondent accounts is likely to become more common as the government widens its tax inquiries beyond Switzerland, Luxembourg and Liechtenstein, said William Sharp, a lawyer who represents taxpayers.

1 Response to “IRS eyes U.S. accounts at Caribbean bank”

  • Joe Lunchpail (02/05/2013, 23:15) Like (0) Dislike (0) Reply
    How nice the United States has decided yet again that another country is its property to do with as it wishes.
    Sure the BVI is a territory,' owned' by England who established the US, but it appears overall that
    Adolf Hitler is alive and well (or a clone of him) do DOMINATE everyone everywhere and make them obey
    orders. Even such matters as "hidden" money in a foreign land is now the United States' business. The
    US thinks it owns the world - but so do other governments including England. Freedom loving people
    beware! It's not just about Schnitzel anymore. These big governments, just like the south american
    dictators, are out to get rid of all freedom and prevent people from just plain enjoying their lives.


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