The authorities in United States have now started targeting Belize-based banks as an expansion towards their search of all those Americans who they suspect of tax evasion by hiding their undisclosed assets and incomes in offshore accounts. The approval to do so has been given on Wednesday by a Miami based federal court. The court gave approval for special legal summons of “John Doe” to seek income related information of all such U.S. taxpayers who may be holding undisclosed accounts at Belize Bank Limited or Belize Bank International Limited.
Court’s approval to go ahead
The Miami court authorized the federal investigators to see records of all those so-called Belize bank correspondent accounts that are maintained in Citibank (NYSE: C) and Bank of America (NYSE: BAC). The IRS can get great insights from all these bank accounts that allow foreign banks to handle financial transactions in U.S. dollars without the presence of the United States as the former can now identify all those U.S. taxpayers who either held or hold accounts at the different Belize financial institutions.
Such ‘John Doe’ summonses by the IRS authorities can provide in-depth information about all such individuals who have been using these Belize financial institutions as well as to the extent in which their funds were transferred to other jurisdictions. However, the acting Assistant Attorney General said that they have been getting information from various sources regarding details of hidden offshore schemes and foreign accounts.
Way forward for the IRS
A legal declaration issued by the IRS said that Belize Bank Limited is based in the Central American nations and owns the Belize Bank International Limited directly and is incorporated. Belize Corporate Services, another company offers the so-called paper companies, “shelf” corporations that can be regarded as the falsified owners of such offshore accounts.
According to the declaration made by the IRS, all the three above mentioned entities are corporate subsidiaries of the BCB Holdings Limited. The IRS’s declaration also described the review of a federal agent on information gathered from all those American citizens who had come forward as a part of a voluntary IRS disclosure program and shared information about their accounts that they held at some time at these Belize Banks.
Earlier in 2009, the U.S. investigators had also got the court’s approval for serving John Doe summonses on UBS, a Swiss banking giant which was the initial target while continuing with massive federal crackdown on cases of offshore tax evasion. UBS (NYSE: UBS), in turn had to disclose information on approximately its 4,450 U.S. clients.