November 27, 2013
U.S. Tightens the Noose on Tax Evaders
Pressure on U.S. tax evaders intensified on Friday as a US District Judge in New York issued an order authorizing the Internal Revenue Service to issue summonses requiring Mellon, Citibank, JP Morgan, HSBC Bank USA and Bank of America to produce information in connection with undisclosed accounts at The Bank of N.T. Butterfield & Son Limited and its affiliates in the Bahamas, Barbados, Cayman Islands, Guernsey, Hong Kong, Malta, Switzerland, and the United Kingdom.
“These John Doe summonses will provide information about individuals using financial institutions from Switzerland to the Cayman Islands to Hong Kong to avoid their US tax obligations,” Assistant U.S. Attorney General Kathryn Keneally said in a statement.
President of the European parliament, Martin Schulz, told CNBC that concerns over tax evasion was leading to a loss of trust in the European public.
“Today’s action shows that the use of foreign banks for tax evasion remains a high investigative priority of this office and US citizens should understand that loud and clear,” said US Attorney Bharara. “By issuing these John Doe summonses, we continue our joint efforts with the IRS to identify and hold accountable those who try to evade their legal responsibility to pay taxes.”
Americans living abroad have grown to hate what the IRS is doing, so much so that this year the number of expatriations will hit a record high, according to government figures, putting the number of Americans abandoning citizenship at 2,369. The reason being that the United States is one of two countries that taxes its citizens on their worldwide income, regardless of where the money was earned.
“These cases once again demonstrate the department’s resolve to uncover and identify taxpayers who tried to hide money overseas as a way to avoid federal taxes,” Keneally said. “US taxpayers still holding accounts who have not come clean should come forward and do the right thing before it’s too late.”