IRS seeks offshore debit card info using John Doe summons

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A woman walks out of the Internal Revenue Service (IRS) headquarters building in Washington, D.C., U.S., on Wednesday, Feb. 17, 2016. Taxpayers have until Monday, April 18 to file their 2015 tax returns and pay any tax owed. Photographer: Andrew Harrer/Bloomberg

A federal court in Montana has authorized the Internal Revenue Service to serve a John Doe summons on a Montana man on the use of offshore accounts in Panama tied to debit cards.

The John Doe summons will be served against Michael Behr of Bozeman, Montana seeking information about U.S. taxpayers who may hold offshore accounts established by Sovereign Management & Legal LTD, a Panamanian entity.

The IRS is looking for records of U.S. taxpayers who, from 2005 to 2016, were issued a Sovereign Gold Card debit card that could be used to access funds on those accounts to help them evade their U.S. tax obligations. The IRS uses John Doe summonses to get information about possible violations of tax laws by individuals whose identities ae unknown.

“In seeking this John Doe summons, the IRS wants to ensure that certain pre-paid payment card users are meeting their responsibilities to properly pay their taxes,” said IRS Commissioner John Koskinen in a statement. “We are taking this step as part of our longstanding efforts against the use of secret offshore accounts. This action will help ensure that pre-paid cards aren’t being inappropriately used to repatriate hidden income and avoid taxes.”

This case is part of an ongoing effort to stop U.S. taxpayers from using offshore accounts to evade federal tax laws. The Justice Department previously obtained a similar order from a federal court in New York, authorizing eight separate John Doe summonses on bank and other entities for information related to SML and its customers in the U.S. The evidence included in the latest request for a John Doe summons was partly built on information provided in response to the earlier summons.

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