John Doe Summons to Wells Fargo Result Of IRS Data-Mining OVDPs, Practitioners Say

The Internal Revenue Service's Offshore Voluntary Disclosure Programs (OVDP) unearthed information on other taxpayers who chose not to disclose their offshore activity. The IRS learned that U.S. taxpayers with accounts at FirstCaribbean International Bank (FCIB) were using a correspondent account at Wells Fargo N.A. to access the money. After this information was discovered, a federal court in San Francisco entered an order authorizing the IRS to serve a John Doe summons to Wells Fargo in search of more information about the FCIB accountholders.

Offshore Tax Compliance Partner Kevin Packman said that John Doe summonses are what the IRS uses when it suspects there is a group of taxpayers using a business entity or financial institution to hide income. Mr. Packman also noted that while more summonses resulting from information obtained from OVDPs are possible, the foreign bank must have a U.S. nexus.

READ: John Doe Summons to Wells Fargo Result Of IRS Data-Mining OVDPs, Practitioners Say