For nearly two years, Fargo businessman Danny Norwood has kept the Internal Revenue Service and U.S. Department of Justice at bay.
A Justice Department attorney says itﾴs been long enough.
Norwood, through his attorney, is asking a federal judge in Fargo to delay a court order requiring him to cooperate in a tax evasion investigation.
In December 2002, the IRS summoned Norwood to meet with an agent and produce documents regarding offshore bank accounts, said Martin Shoemaker, an attorney with the U.S. Department of Justice Tax Division.
Norwood, 1906 Rose Creek Parkway E., met with an IRS agent a month later, but refused to provide any information about foreign accounts, court records say.
ﾓThis case is two years old now,ﾒ Shoemaker told U.S. District Judge Ralph Erickson. ﾓPublic interest weighs in favor of not issuing a stay.ﾒ
Norwood, part owner of two agricultural equipment companies in North Dakota and another corporation that owns and operates coffee shops in the Twin Cities, caught the attention of IRS investigators in 2002, court records say.
The IRS had embarked on a nationwide investigation aimed at identifying people suspected of hiding income in offshore accounts and using credit cards to access the money from the United States.
Establishing offshore bank accounts is not illegal, but abusing it to avoid paying taxes is, Shoemaker said.
The Justice Department and IRS filed petitions in federal courts around the country, seeking credit card company records, including records for MasterCard accounts at the Leadenhall Bank and Trust Co. in Nassau, Bahamas.
Norwood maintained two accounts at the Bahamas-based bank and used credit cards to access them.
Yet on his 1999 and 2000 tax returns, Norwood checked ﾓnoﾒ when asked if he had any interest in a financial account in a foreign country, court records say.
In March, Erickson ordered Norwood to produce the financial information sought by the government, and to authorize the release of records from Leadenhall Bank and Trust.
Norwood has appealed Ericksonﾴs court order.
His attorney, Jon Jensen of Grand Forks, N.D., argued during a hearing Wednesday that the order should be delayed until the 8th Circuit Court of Appeals considers the case.
Erickson said he needs more time to consider delaying the order and took it under advisement.
Norwood didnﾴt attend last weekﾴs court hearing and when contacted at his Fargo home, he declined to comment and referred questions to Jensen.
Forcing Norwood to produce the information sought by the government would violate his right to protection against self incrimination, Jensen said.
ﾓThe government has made it very clear that they intend to prosecute so the documents should not have to be turned over,ﾒ he said.
An estimated 400,000 taxpayers used tax-evasion schemes in 2000, costing the Treasury as much as $40 billion, according to a report issued last November by the U.S. governmentﾴs General Accounting Office.
More than two-thirds of those taxpayers hid money in offshore bank accounts and used credit or debit cards to access the money, the report says.
By Jeff Zent, The Forum
