Court Authorizes Service of John Doe Summons Seeking Information About Dutch Residents Using American Express Cards Linked to Non-Dutch Bank Accounts
Justice Department Requested Authorization to Issue Summons Pursuant to Tax Treaty between United States and the Netherlands
A federal court in Texas authorized the Internal Revenue Service (IRS) to serve a John Doe Summons on American Express Travel Related Services Company, the Justice Department announced. The IRS John Doe summons seeks information about persons residing in the Netherlands that have American Express debit or credit cards linked to bank accounts located outside of the Netherlands. The summons is referred to as “John Doe” summonses because the IRS does not know the identity of the person being investigated.
The United States petitioned the U.S. District Court in the Western District of Texas to authorize the summons at the request of the government of the Netherlands under a treaty between the Netherlands and the United States. The treaty allows the two countries to cooperate in exchanging information that is helpful in enforcing each country’s tax laws. The IRS summons 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. 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.
“The Department of Justice and the IRS are committed to working with the United States’ international treaty partners to identify individuals using secret offshore accounts to evade tax laws,” said Acting Assistant Attorney General David A. Hubbert of the Justice Department’s Tax Division. “This sustained collaboration limits the opportunities to hide assets and belies the assumption that information about them is beyond a taxing authority’s reach.”
“In fighting international tax evasion, the IRS recognizes hidden offshore accounts are a problem other nations face as well,” said IRS Commissioner John Koskinen. “By using our existing network of bilateral agreements and tools such as the John Doe summons, we can help address a common problem of evading taxation by hiding assets abroad.”
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.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.