William Jennings, Managing Director of Bahamas-based Leadenhall Bank and Trust has been rebutting claims that the IRS and Justice departments had filed claims against it in federal courts concerning the accounts of some of its clients.
The US tax authorities are currently investigating offshore credit and debit card accounts held by Americans trying to illegally evade US tax laws. However, Jennings said providing such information was the responsibility of the client – not the bank.
“The IRS is pressing our clients to do that,” Jennings told the Nassau Guardian, adding: “Our clients always sign a waiver of bank secrecy and we strongly recommend that they get their own legal advice.” This is due to change however, when a joint US/Bahamas tax information agreement comes into force.
Whilst it is legal for an offshore bank to issue credit and debit cards, the IRS will pursue those who use them for the sole purpose of hiding income from the tax collector. Thousands of Mastercard and American Express records have been obtained since the crackdown was first launched in October 2000, though this is the first time that proceedings have been initiated against individual US citizens. The actions came about due to the failure of the 10 individuals involved to respond to previous summonses.
The IRS currently has an amnesty for people to voluntarily declare their offshore credit and debit cards. However, the deadline to avoid prosecution falls on April 15. It estimates that there are some 1 million card holders, all of whom will face an audit and possible criminal sanctions. This is thought to be somewhat of an over-estimation however, as it does not take into account multiple accounts held by the same person.
By Amanda Banks, Tax-News.com
