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“John Doe” Summons Served on First Data Offshore Accounts

Posted in Articles & Publications on April 10, 2009 | Share

On April 16, 2009, a federal judge in Denver granted a Justice Department request to serve a “John Doe” summons on payment processor First Data Corporation (“First Data”).  The “John Doe” summons seeks the names of all First Data clients that allegedly used First Data to transfer the proceeds of credit and debit card transactions to offshore accounts since 2002.  First Data allegedly used software from Bermuda-based First Atlantic Commerce Ltd. to transfer credit and debit deposits into offshore accounts.  By granting the “John Doe” summons, Judge Robert Blackburn aided federal authorities in their ongoing investigation into U.S. taxpayers who have used offshore accounts to evade their taxes.  First Data will be required to disclose the names of merchants that transferred funds into offshore bank accounts, which could lead to U.S. taxpayers who held offshore accounts. 

Once the IRS and the Justice Department identifies U.S. accountholders, it can begin an investigation into criminal and civil penalties.  U.S. taxpayers are required to disclose any interest in foreign bank accounts with assets in excess of $10,000 on their Foreign Bank and Financial Account Report (FBAR).  Failure to report foreign assets can result in criminal penalties of up to five years in prison and civil penalties of $100,000 or 50% of the balance in unreported foreign accounts, whichever is greater.  

These developments come amid growing pressure on Swiss banking giants UBS AG and Credit Suisse to close offshore accounts and disclose the names of U.S. accountholders to U.S. federal authorities in their ongoing investigation.   Furthermore, the Obama Administration recently stated that prosecuting U.S. taxpayers that failed to disclose offshore account holdings is a “top tax priority” of the Administration.  

To potentially avoid criminal prosecution, taxpayers should voluntarily disclose their offshore accounts as soon as possible, however there are many issues to consider in order to qualify.  Any U.S. taxpayer who has an offshore UBS account and receives notice that their offshore account has been closed should contact the Thorn Law Group. 

For more information on this matter, see “John Doe” Summons Served on First Data Offshore Accounts at www.thorntaxlaw.com or contact Kevin E. Thorn at 202-270-7273 orket@thornlawgroup.com.

“John Doe” Summons Served on First Data Offshore Accounts  is provided as an education service and is not intended to be and should not be construed as legal advice.  Readers with particular needs on specific issues should retain the services of competent counsel. 


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"Mr. Thorn and the attorneys at Thorn Law Group were so knowledgeable about the IRS Voluntary Disclosure Program and about the way the IRS Criminal Investigation Division works. Mr. Thorn helped put my mind at ease and walked me through the whole Voluntary Disclosure process. With the help of Thorn Law Group, and Mr. Thorn specifically, we were able to get back into compliance and were able to avoid criminal prosecution."