Court Orders Fedex, CitiBank & Others to Give the IRS Panama Offshore Account Info!

In the case of In the Matter of Tax Liabilities of John Does, case number 1:21-mc-00424-GHW, a federal judge said that he will allow the IRS to obtain from couriers and financial institutions, including FedEx and Bank of America, records of individuals who may have used Panamanian offshore service providers to hide assets, the U.S. Justice Department said on July 29, 2021.

U.S. District Judge Gregory H. Wood, of the Southern District of New York, approved Internal Revenue Service summonses Wednesday to seek the information from financial institutions including Citibank, Wells Fargo Bank and couriers including FedEx Corp. and UPS Inc.

The Summonses Request Information on Deliveries and Electronic Fund Transfers Between

Panama Offshore Legal Services and Clients Who
May Have Used Its Services To Create or Control

Foreign Assets To Avoid Tax Obligations, The DOJ Said.

"The Department of Justice, working alongside the IRS, is dedicated to unearthing the use of foreign bank accounts to evade U.S. taxes, " acting assistant Attorney General David A. Hubbert said in a statement. "We will use the many tools available to us, including John Doe summonses like the ones authorized today, to ensure that taxpayers are fully meeting their responsibilities."

The IRS is investigating taxpayers who may have used Panama Offshore Legal Services, which is part of a collective of related entities known as the POLS Group, to facilitate concealing income and assets from U.S. tax authorities between 2013 and 2020. The government has been seeking information from other entities, including MoneyGram Payment Systems, through a separate summonses request in Minnesota to investigate those who may have violated U.S. laws by hiding taxable income and assets.

POLS is a Panamanian law firm that advertises services including the creation of foundations and corporations as well as offshore financial accounts while promising clients "100% anonymity, privacy and confidentiality, " according to the DOJ.

Through the IRS' offshore voluntary disclosure program, which allows for voluntary disclosure in exchange for fixed penalties, the government has learned of at least one U.S. person who used POLS' services to create an unreported offshore account and entity in Panama, the DOJ said.

Currently, there are no allegations against the couriers or financial institutions that they have engaged in any wrongdoing, the government said. Instead, the IRS uses the John Doe summonses to get relevant information when there may be possible violations of tax laws and the violators are unknown, the DOJ said.

According to a May declaration by IRS revenue agent Katy Fuentes, POLS also accepts payment for its services by wire transfer, and the IRS is aware of at least four U.S. banks, HSBC Bank, Bank of America, Wells Fargo and Citibank, that maintain accounts with banks in Panama known to be used by the POLS Group, according to the filing.

In his order approving the summonses request, Judge Wood said there was a reasonable basis to believe that certain people may have failed to comply with tax laws and the information sought by the government is not readily available from other sources.

The summonses will direct 10 companies to produce records that will help the government identify U.S. individuals who may have used POLS Group's services, the DOJ said Thursday.

"These court-ordered summonses should put on notice every individual and business seeking to avoid paying their fair share of taxes by hiding assets in offshore accounts and companies, " IRS Commissioner Chuck Rettig said in a statement. "These records will empower the IRS and the Department of Justice to find those attempting to skirt their tax obligations and ensure their compliance with the U.S. tax laws."

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