Monday, April 3, 2017

Court Authorizes John Doe Summons to American Express Unit for Netherlands Taxpayer Info (4/3/17)

DOJ Tax announced today, here, that the district court for WD TX has authorized a John Doe Summons sought on behalf of the Netherlands pursuant to the exchange of information provision of the tax treaty between the U.S. and the Netherlands.  The JDS is issued to American Express Travel Related Services Company and seeks "the identities of Dutch residents who have debit or credit cards linked to bank accounts located outside of the Netherlands so the Dutch government can determine if those persons have complied with Dutch tax laws."

[The] request is based on the Netherlands Tax and Customs Administration’s (NTCA) Payment Card Project, in which information on the use of payment cards (debit or credit) issued by financial institutions outside of the Netherlands can be used to identify non-compliant Dutch taxpayers. NTCA’s project has made similar requests, and already obtained similar information, from other financial institutions outside the United States resulting in several million euros in additional tax, interest and penalties from the non-compliant Dutch taxpayers, according to evidence submitted with the petition. American Express informed the NTCA that the transaction information sought is exclusively available in the United States, according to the evidence submitted with the petition. filing does not allege that American Express violated any U.S. or Dutch laws with respect to these accounts. 
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The court order in this case authorizing this enforcement action is a part of ongoing international efforts to stop persons from using foreign financial accounts as a way to evade taxes. Courts have previously approved John Doe summonses allowing the IRS to identify individuals using offshore accounts to evade their U. S tax obligations, and have approved John Doe summonses to be used to identify individuals using U.S. financial institutions or accounts to evade tax obligations of a foreign county, pursuant to international tax treaties.
I posted recently on a Netherlands initiative on foreign accounts involving Credit Suisse:  Credit Suisse Caught in Multi-Country Tax Evasion Investigation (Federal Tax Crimes Blog 4/1/17), here.  I have no idea if the two are related initiatives, but it does appear that the Netherlands is serious about cracking down on its citizens' use of foreign accounts for tax evasion.

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