26 March 2002: See USA court filings in support of summons:
http://cryptome.org/usa-visa-does.htm
26 March 2002: See New York Times report:
http://www.nytimes.com/2002/03/26/business/26TAX.html
25 March 2002
Source: Fax from the US Attorney's Office, Northern District of California.
U.S. Department of JusticeUnited States Attorney
Northern District of California11th Floor, Federal Building
450 Golden Gate Avenue, Box 36055
San Francisco, California 94102(415) 430-7200
FAX (415) 436-7234
FOR IMMEDIATE RELEASE March 25, 2002
The Department of Justice and The United States Attorney's Office for the Northern District of California today asked a federal court in San Francisco to approve its service of a John Doe summons on VISA International. "John Doe" summonses permit the IRS to obtain information about people whose identities are unknown. The information expected in response to the summons will help the IRS identify people who use offshore accounts to evade their United States income tax liabilities. There are VISA-sponsored credit, charge or debit cards issued by banks in more than 30 countries, including Switzerland, Latvia, Luxembourg, Hong Kong, Bermuda and numerous Caribbean nations.
Diversion of income to offshore tax havens with strict bank secrecy laws represents a significant area of noncompliance with the tax laws.
One way individuals divert income and evade their U.S. tax obligations is by maintaining bank accounts in foreign tax havens and using credit or debit cards issued by the offshore bank. It is not illegal to have an offshore credit card. However, people use these cards to tap into foreign bank accounts to get easy access to cash while evading paying taxes. They can use the cards to pay for everyday expenses like groceries and gas or even purchase luxury items such as boats and cars.
Since these cards are issued from banks located in tax haven countries, it has been difficult for the IRS, to trace these transactions back to the taxpayer. These subpoenas give the IRS the ability to identify these transactions.
Also today, in a federal court in Miami, The Department of Justice filed papers reflecting American Express's agreement to turn over records relating to people who may be subject to United States income taxes and who have credit card accounts with addresses in Antigua and Barbuda, the Bahamas or the Cayman Islands.
MasterCard has already produced over 1.7 million records, involving over 230,000 accounts, in response to a John Doe summons, According to the IRS, that information will be used in civil audits and criminal investigations.
"We are pleased with the information the IRS has received from MasterCard, and look forward to the information American Express has agreed to provide, and that which we expect VISA to provide in response to the summons we are now seeking to serve," said Eileen J. O'Connor, Assistant Attorney General for the Justice Department's Tax Division.
"The IRS believes the use of offshore accounts is enabling people to evade billions of dollars per year in United States taxes, The information from. these summonses will permit the IRS to identify many of these tax evaders."
If the MasterCard information is representative of the industry, there could be 1 to 2 million U.S. citizens with debit/credit cards issued by offshore banks. This compares with only 170,000 Reports of Foreign Bank & Financial Accounts (FBARS) being filed in 2000 and only 117,000 individual 1040 filers indicating they had offshore bank accounts (tax year 1999).
A copy of this press release and related court documents may be found on the U.S. Attorney's Office's website at http://www.usdoj.gov/usao/can/press/index.html
All press inquiries to the Department of Justice should be directed to the Office of Public Affairs at (202) 514-2007 and inquiries to the U.S. Attorney's Office should be directed to Assistant U.S. Attorney Matthew J. Jacobs at (415) 436-7181.