IRS Summons to Find Tax Cheats

The federal district court can authorize IRS to issue “John Doe” summons. This is a summons directed to an entity to disclose records of yet to be determined taxpayers who may have tax due the IRS. This type of summons has been issued to eight entities that may have connection to Sovereign Management & Legal Services. The aim at issuing the summons is to obtain records of taxpayers who may have used the services of Sovereign “to establish, maintain, and/or conceal foreign accounts, assets and entities.” The companies that will be producing records include: Federal Express, FedEx Ground Package System, DHL Express, United Parcel Service Inc.,Western Union Financial Services Inc.,The Federal Reserve Bank of NY, Clearing House Payments Company and HSBC USA National Association.
 The summons is intending to identify taxpayers who used Sovereign services from 2005 through 2013. According to DOJ, Sovereign offers services including formation and administration of anonymous corporations, mail forwarding, virtual offices, re-invoicing and professional “managers” who act for true owners. These activities it is alleged are designed to assist the evasion of US taxes.  The IRS has had a huge success with the offshore account program resulting in billions of collected taxes and penalties and will most likely continue this type of enforcement activity. Criminal allegations are starting to rumble against some of the entities as well.  HSBC is currently on the rack with others sure to follow.