The Ripple Effects of the IRS Offshore Account Initiative - Turks & Caicos (9/6/13)

This just hit my radar screen.  Hayden Boyce, CIBC FCIB Turks and Caicos Islands Named in IRS Investigation, (Turks & Caicos Sun 8/13/13), here.  The Wikipedia entry for the Turks & Caicos is here.  The players and observers in the field knew that T&C was a player in the offshore account evasion game.  But, maybe it would be considered too minor to devote significant enforcement resources.  Maybe not:

The article says:

A revenue agent from the United States of America’s Internal Revenue Service (IRS) says she has uncovered evidence that the CIBC FCIB branch in the Turks and Caicos Islands was one of many in the Caribbean used by wealthy American citizens to hide money. 

In documents filed in the United States District Court for the Northern District of California, San Francisco Division, Cheryl Kiger, said that during her investigation she interviewed a wealthy American taxpayer who controlled three different business accounts and one personal account at CIBC FCIB in the Turks and Caicos Islands. 

She stated: “Some of those deposits to those accounts represented income earned for advisory services provided to third parties. He failed to report this income on his US income tax returns until he made his voluntary disclosure in 2009.” 

Those interested should read the article.

The key point for present purposes is that it is one thing for a U.S. person to have an account in a foreign bank -- say in Switzerland, the Cayman Islands and other usual (and unusual) suspects -- it is another to weave a web of deception with nominal entities which are nothing more than fronts to hide tax evasion. I think the Government recognizes that because the overwhelming number of prosecutions involve such nominal -- OK, the word is sham - entities.

U.S. persons -- commonly called in my profession U.S. taxpayers (although, in this context, nontaxpayers) -- need to pay attention to these developments.  If nothing else, the civil statute of limitations for tax, penalties and interest for this conduct is forever.

I previously reported on the CIBC FCIB John Doe Summons.  See John Doe Summons Issued to Wells Fargo for Records of CIBC FirstCaribbean International Bank Correspondent Account (Federal Tax Crimes Blog 4/30/13), here.