9th JDS Authorized for Sovereign Management & Legal LTD Information (1/24/17)

DOJ Tax announced here the unsealing of a district court order, here, to serve a John Doe Summons on "to serve a John Doe summons on Michael Behr of Bozeman, Montana, seeking information about U.S. taxpayers who may hold offshore accounts established by Sovereign Management & Legal LTD (SML), a Panamanian entity."  The order seeks "records of U.S. taxpayers who, during the years 2005 to 2016, had been issued a 'Sovereign Gold Card' debit card that could be used to access the funds in those accounts in such a manner as to evade their obligations under internal revenue laws."

Key excerpts:

U.S. taxpayers seeking to hide their offshore assets often utilize the services of offshore trusts and corporate service providers that open bank accounts, create corporations and other entities, and serve as nominee officers. In its petition seeking the issuance of the John Doe summons, the United States alleges that SML advertises various “packages” to allow taxpayers to hide their assets offshore. These packages include corporations owned by other entities (to include fake charitable foundations), all held in the name of nominee officers provided by SML. SML then opens bank accounts for these entities and provides debit cards in the name of the nominee to the taxpayer. By using such cards, taxpayers seek to access their offshore funds without revealing their identities. U.S. District Court Judge Brian Morris found that there is a reasonable basis for believing that U.S. taxpayers may be using the Sovereign Gold Card to violate federal tax laws. 

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This case is part of an ongoing effort to stop U.S. taxpayers from using offshore financial accounts as a way to evade federal tax laws. The Justice Department previously obtained a similar order from the U.S. District Court for the Southern District of New York, authorizing issuance of eight separate John Doe summonses on bank and other entities for information related to SML and its customers in the United States. The evidence submitted in this request to issue a John Doe summons was built in part on information provided in response to the earlier summons.

SML was already on the IRS list titled "Foreign Financial Institutions or Facilitators, here.  It is #14 on the list as Sovereign Management & Legal, Ltd., its predecessors, subsidiaries, and affiliates (effective 12/19/14).    The list is maintained so that U.S. taxpayers joining OVDP will know that their OVDP penalty cost is 50 percent rather than 27.5 percent of the high amount.

There is no indication why so many separate JDS were required (8 in SDNY and this 1 in Montana).

I did a quick google search on Sovereign Management & Legal LTD and found this web site for a company (LTD) of the same name:  https://www.offshore-protection.com/   I don't know whether it is the same or a related company, but seems to be the type of company that, if it has U.S. persons as customers for the services it offers, might draw the interest of the IRS.  And, if this company is related, then it is within the scope of the SML listing on the IRS web page.