DOJ SEEKS INFORMATION ON SOME ACCOUNTS AT CIBC FIRSTCARIBBEAN

(The following is a reformatted version of a press release
issued by The U.S. Justice Department and received via
electronic mail. The release was confirmed by the sender.) 
APRIL 30, 2013 
COURT AUTHORIZES SERVICE OF JOHN DOE SUMMONS SEEKING THE
IDENTITIES OF U.S. TAXPAYERS WITH OFFSHORE ACCOUNTS AT CIBC
FIRSTCARIBBEAN INTERNATIONAL BANK 
WASHINGTON - The Justice Department announced that late
yesterday a federal court in San Francisco entered an order
authorizing the Internal Revenue Service (IRS) to serve a John
Doe summons seeking information about U.S. taxpayers who may
hold offshore accounts at Canadian Imperial Bank of Commerce
FirstCaribbean International Bank (FCIB). The order was signed
by Senior District Judge Thelton E. Henderson. The IRS summons
seeks records of FCIB’s United States 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 FCIB’s Wells
Fargo correspondent account. 
Pursuant to a petition filed by the United States, 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. 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. 
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. Although
FCIB does not have U.S. branches, it maintains a correspondent
account in the United States at Wells Fargo Bank N.A. As alleged
in Agent Kiger’s declaration, the IRS learned that U.S.
taxpayers were using FCIB to help them keep their offshore
accounts undetected by the IRS and not to pay U.S. federal
income tax on money placed in those offshore accounts. 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 Program. 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. 
“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,” said Kathryn Keneally, Assistant Attorney General
for the Justice Department’s Tax Division. “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.” 
“This summons marks another milestone in international tax
enforcement,” said IRS Acting Commissioner Steven T. Miller.
“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.” 
In a similar case, on Jan. 28, 2013, the U.S. District Court for
the Southern District of New York entered an order authorizing
the IRS to serve a John Doe summons on UBS AG, seeking records
of Swiss bank Wegelin & Co.’s United States correspondent
account at UBS, which will allow the United States to determine
the identity of U.S. taxpayers who hold or held interests in
financial accounts at Wegelin and other Swiss financial
institutions to evade federal income taxes. 
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. A deliberate
failure to report a foreign account can result in a penalty of
up to 50 percent of the amount in the account at the time of the
violation. U.S. taxpayers are reminded that the IRS currently
has in place an Offshore Voluntary Disclosure Program where U.S.
taxpayers can come forward and disclose their offshore accounts
and income. For more details, please go to the IRS’s website:
www.irs.gov/uac/2012-Offshore-Voluntary-Disclosure-Program. 
A correspondent account is a bank deposit account maintained by
one bank for another bank. Financial transactions involving U.S.
dollars flow through U.S. banks. Therefore, foreign banks that
do business in U.S. dollars, but have no office in the U.S.,
obtain a correspondent account at a U.S. bank in order to engage
in such transactions. These transactions leave a trail in the
U.S. that the IRS can access through the records of the
correspondent bank accounts. These correspondent bank accounts
have records of money deposited, money paid out through checks
and money moved through the correspondent account by wire
transfers. All of this information the IRS can obtain through a
John Doe summons issued to the U.S. bank holding the
correspondent account. 
(bjh) NY 
#<873920.660640.3.4.1.0.76>#
 
 
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