As reported in the DOJ news release, the Justice Department announced that federal courts in Minnesota, Texas, Pennsylvania, Oklahoma, Virginia and California have entered orders over the past week authorizing the Internal Revenue Service (IRS) to serve John Doe summonses on certain U.S. banks and financial institutions, seeking information about persons who have used specific credit or debit cards in Norway. The summonses are referred to as “John Doe” summonses because the IRS does not know the identity of the person being investigated. While orders have been entered in seven of these cases, the United States’ petitions in three additional cases remain pending.
The lawsuits, filed on July 19 and 22, 2013, in nine federal districts, were initiated at the request of the Norwegian government under a treaty between Norway and the United States. The treaty allows the two countries to cooperate in exchanging information that is helpful in enforcing each country’s tax laws. The United States is seeking the identities of persons who have used specific debit or credit cards issued by certain U.S. financial institutions so that Norway can determine if those persons have complied with Norwegian tax laws. A total of 18 U.S. financial institutions are identified in the government’s court filings. The filings do not allege that these financial institutions have violated any U.S. laws with respect to these accounts.
As alleged in court papers filed by the Justice Department, Norwegian authorities have reason to believe, based upon the use of payment cards in Norway that were issued by U.S. banks, that unidentified card holders may have failed to report financial account information or income on their Norwegian tax returns. Court papers cite examples where individuals using non-Norwegian payment cards have claimed to be tax residents of other countries but were found to have resided in Norway for sufficient time to subject them to taxes in Norway.
The Department of Justice and the IRS are committed to working with our treaty partners to fight tax evasion wherever it occurs,” said Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division. “All taxpayers should know that our efforts in this area are global, coordinated and will continue.”
“These summonses reflect our continuing efforts to work with our international partners on offshore tax evasion,” said Douglas O’Donnell, IRS Assistant Deputy Commissioner, Large Business & International (LB&I). “By using effectively our existing network of bilateral agreements, countries can help one another put an end to the global practice of evading taxation by hiding assets abroad.”
The lawsuits are a part of ongoing international efforts to stop persons from using foreign financial accounts as a way to evade taxes. Courts have previously approved John Doe summonses allowing the IRS to identify individuals using offshore accounts to evade their U. S tax obligations. In the present suits, the Justice Department is seeking the identities of persons who may be attempting to hide their Norwegian taxable income in U.S. financial accounts.
Below is a list of the decided and pending cases. Copies of the pleadings will be made available on the Tax Division’s website :
- Petitions Granted:
In the Matter of the Tax Liabilities of John Does , Case No. 13-cv-01097 (C.D. Calif.)
In the Matter of the Tax Liabilities of John Doe , Case No. 13-mc-00056 (D. Minn.)
In the Matter of the Tax Liabilities of John Does , Case No. 13-mc-00024 (E.D. Va.)
In the Matter of the Tax Liabilities of John Does , Case No. 13-mc-00018 (N.D. Okla.)
In the Matter of the Tax Liabilities of John Does , Case No. 13-cv-01066 (W.D. Pa.)
In the Matter of the Tax Liabilities of John Doe , Case No. 13-mc-00657 (W.D. Tex.)
In the Matter of the Tax Liabilities of John Doe , Case No. 13-mc-00232 (W.D. Tex.)
- Pending Petitions:
In the Matter of the Tax Liabilities of John Does , Case No. 13-cv-03393 (N.D. Calif.)
In the Matter of the Tax Liabilities of John Doe , Case No. 13-mc-00301 (S.D. Miss.)
In the Matter of the Tax Liabilities of John Doe , Case No. 13-mc-00038 (D. N.H.)
More information about the Justice Department’s Tax Division is available at https://www.justice.gov/tax/ .