U.S. seeks data on suspected tax cheats for Norway

It's no big secret that the United State government has been working diligently to close the lid on suspected American tax evaders. Foreign bank accounts have been the big targets.

Anyone who is found to have not completed a Report of Foreign Bank and Financial Accounts, informally known as an FBAR, runs the risk of being targeted for possible tax evasion penalties unless they take corrective action. Individuals in Maryland, Virginia or the District of Columbia facing such issues should be working with an experienced attorney to know their rights, obligations and options.

What may come as a surprise to some readers is the extent to which the world's wealthy governments are working together to try to put an end to overseas tax evasion. There are reciprocal agreements being enforced on an international scale. What that means is that the Internal Revenue Service is going to bat for other countries to help uncover U.S. bank accounts suspected of being used to hide taxable income from those governments.

An example of how this has been playing out is offered up in a news release from the U.S. Department of Justice this week. In it, officials confirmed that for the first time the IRS has been seeking "John Doe" summonses in federal courts in this country on behalf of Norway. Petitions for these broad warrants have been made in at least district courts, including Virginia. As a result of the Virginia summons, records at Citibank, Bank of America, M&T Bank and Capital One Bank are expected to be opened for review.

"John Doe" summons are typically sought when government officials don't know who they're after. The standard for getting one isn't particularly high. All officials have to do is show they have reason to believe tax laws have been broken and they can't get information any other way.

In the work for Norway, the information being sought is more focused on trying to identify U.S. accounts that have been used by Norwegians to fund transactions in Norway. In many instances, the suspects are said to be wealthy people who claim not to live in Norway, but remain residents for tax purposes.

Regardless of who holds such accounts, there are requirements of due process that need to be followed under U.S. law. It is always legitimate to ask whether that process has been properly followed.

Source: Forbes.com, "U.S. Seeks PNC, Wells Fargo, JP Morgan Records To Find Tax Cheats--From Norway," Janet Novack, July 28, 2013

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