“IRS eyes U.S. accounts at Caribbean bank” by Nanette Byrnes, Reuters, 4/30/13
U.S. Department of Justice said April 30, 2013 that a federal court has authorized the IRS to seek information on U.S. taxpayers who may have accounts at Canadian Imperial Bank of Commerce, First Caribbean International Bank (FCIB).
The U.S. Justice Department said a court order would let the IRS serve a “John Doe” summons seeking records on 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 court 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.”
IRS Acting Commissioner Steven Miller said: “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”.
FCIB, based in Barbados, has branches in 18 Caribbean countries, was formed in 2002 by Britain’s Barclay’s Bank and Canadian Imperial Bank of Commerce (CIBC). In 2006, CIBC became the bank’s majority shareholder.
FCIB does not have U.S. branches but it has a correspondence account in the U.S. at Wells Fargo. The IRS uses a John Doe Summons to get information on “tax cheats” 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 IRS filed a court declaration by a senior IRS Revenue Agent that said many FCIB customers in the “John Doe class” may have been under-reporting income, or evading income taxes.
The FCIB case stemmed from information from 125 customers of the Barbados Bank and its predecessor banks who participated in the IRS Voluntary Disclosure Program.
In an April 26, 2013 report, the U.S. Government Accountability Office (GAC) revealed that the IRS voluntary disclosure programs (four Amnesty Programs) have resulted in more than 39,000 disclosures by taxpayers and more than $5.5 billion in monies as of December 31, 2012.
Of the 10,439 closed 2009 OVDP cases, the GAO estimates that the bottom 10% of the participants had account balances of less than $79,000, the top 10% had balances over $4M, and the median account balance was $570,000.