IRS Digs Deeper for Bank Accounts of Its Citizens Suspected of Evading Taxes

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Updated: September 17, 2015

The United States of America is clamping down on their citizens who are suspected of evading taxes by hiding their income and assets in offshore accounts.  Once a tax haven for foreigners, financial institutions in Belize are now being targeted to reveal information on accounts belonging to American nationals.  An online article has indicated that U.S. District Judge Ursula Ungaro of a Federal Court in Miami, Florida, granted the State’s petition for permission to seek records of Belize Bank International Limited and Belize Bank Limited correspondent accounts at Bank of America and Citibank.  That decision means that a Special ‘John Doe’ legal summonses was approved which seeks to access information on US tax payers who may have undeclared accounts at the Belize Bank International Limited or Belize Bank Limited.  Through this court order, federal investigators are now authorized to research records of so-called correspondent accounts that the Belize Bank maintain at Bank of America and Citibank.  The authorities believe that the information on those accounts from banks who conduct transactions in US dollars whilst not having a presence in the United States will help the IRS find the taxpayers who have accounts at the Belize banking institutions.  The article went on to say that there is another company, Belize Corporate Services that provides so-called “shelf” corporations, paper companies that can be named as the purported owners of offshore accounts.  All three entities are corporate subsidiaries of BCB Holdings Limited, according to the IRS declaration. That declaration described a federal revenue agent’s review of information gathered from Americans who came forward under a voluntary IRS disclosure program and provided information about accounts they once held at the Belize banks.  The court action marks federal investigators’ latest use of the special summonses to compel account disclosures by offshore banks suspected of helping wealthy American clients evade U.S. taxes. The IRS previously used the tactic to pursue account data from banks elsewhere around the world.  The US Federal Tax Law requires American taxpayers to pay taxes on all income earned worldwide and to also report foreign financial accounts once the total value of the accounts exceeds $10,000 at any time during the calendar year.  Knowingly withholding this information on a foreign account can result in a fine of up to 50 percent of the amount in the account at the time of the violation.  Back in 2009, U.S. investigators also won court approval to serve John Doe summonses on Swiss banking giant UBS.  UBS ultimately turned over information on an estimated 4,450 American clients. The bank, Switzerland’s largest, also paid a $780 million fine under a deferred prosecution agreement after acknowledging it had helped clients duck U.S. taxes.