The Internal Revenue Service and the U.S. Department of Justice are expanding their investigation of offshore tax cheats to the Caribbean. Last week, a federal district court in California has authorized service of a “John Doe: summons for the records of U.S. customers of FirstCaribbean International Bank (FCIB). The bank, based in Barbados, operates in 18 Caribbean countries and has a correspondent account with San Francisco-based Wells Fargo Bank.
The IRS uses John Doe summonses to obtain information about possible violations of internal revenue laws by individuals whose identities are unknown. The Department of Justice said the IRS summons seeks records of FCIB’s United States correspondent account at Wells Fargo and that the summons will allow the IRS to identify US taxpayers who hold or held interests in financial accounts at FCIB and other financial institutions that used FCIB’s Wells Fargo correspondent account.
It appears that the IRS investigation is based on the information obtained in the Offshore Voluntary Disclosure programs, which offered an amnesty for taxpayers who voluntarily confessed ownership of, and paid taxes and penalties on previously undisclosed offshore accounts. The disclosure program has generated responses from 129 customers at FirstCaribbean, opening the door for a further investigation into the bank’s records.
Steven T. Miller, acting commissioner of the IRS, said the investigations won’t end in the Caribbean. “Our work here shows our resolve to pursue these cases in all parts of the world,” he said.