- IRS gets judge's approval to serve summons on two banks
- Investigation into wealthy Americans avoiding taxes widens
In its hunt for tax cheats, the U.S. Internal Revenue Service is headed to Belize.
On Wednesday, a federal judge in Miami authorized the IRS to serve a so-called “John Doe” summons on two U.S. banks for correspondent account information related to Belize Bank International Ltd. and Belize Bank Ltd., both subsidiaries of BCB Holdings Ltd. Such summons are used by the IRS to get information about possible tax evasion when they don’t know the identities of the taxpayers, but suspect a group of Americans may be using such accounts to dodge taxes.
The move is a further expansion of the government’s investigation into wealthy Americans using undeclared offshore bank accounts to dodge taxes.
The IRS is serving the summons on Bank of America NA, a subsidiary of Bank of America Corp., and Citibank, a subsidiary of Citigroup Inc., seeking information about their correspondent accounts with the two Belize banks. Judge Ursula Ungaro also gave the IRS permission to seek records on the banks’ accounts at a corporate services provider called Belize Corporate Services, also a subsidiary of BCB.
Lyndon Guiseppi, chief executive officer of BCB, didn’t immediately respond to a phone message or e-mail request for comment. Mark Costiglio, a Citigroup spokesman, and Lawrence Grayson, a spokesman for Bank of America, declined to comment.
A court filing by the Justice Department says U.S. taxpayers used Belize entities to avoid disclosing foreign accounts.
The IRS and Justice Department have used such summonses to get information on account holders at several Swiss banks, including UBS Group AG, as part of a broad probe into tax evasion and offshore accounts. More than 50,000 Americans have avoided prosecution by disclosing undeclared accounts, paying more than $7 billion. Offshore banks, meanwhile, have agreed to pay more than $4 billion in U.S. fines, penalties and restitution.
As part of those disclosures, U.S. taxpayers have revealed at least 23 previously undisclosed accounts at the two Belize banks, according to an IRS agent’s declaration filed in the Miami court proceeding.