The power of the IRS summons might surprise you. Whereas a warrant request typically must name a specific person, the IRS has been allowed to request a summons for a whole category of taxpayers, without specifically naming them. The so-called John Doe summons, issued to IRS examiners, allows the IRS to obtain the names of individual taxpayers.
For example, one federal court judge approved the IRS’s request for a John Doe summons seeking the identities of any U.S. taxpayers holding offshore accounts established by a particular company. The IRS wanted a list of all U.S. taxpayers that the company might have issued a debit card to between an 11-year period: 2005 to 2016.
The stated purpose of the summons was to identify potential offshore tax evasion. With a company-issued debit card, taxpayers might be accessing their offshore funds without leaving a paper trail or other record by which the IRS would traditionally be able to catch tax discrepancies.
This post should be of interest to more than just offshore account users, however. Since the IRS has had success in court utilizing broad discovery techniques, anyone who is involved in a tax dispute or controversy with the IRS would be well served to seek legal counsel.
True, a warrant is only a means to obtaining relevant evidence, and the IRS would still have to meet its burden of proof in court. However, the administrative resources and expertise of the IRS are nothing to underestimate. Fortunately, our Connecticut tax law firm has been helping with state and federal tax court disputes for over 45 years. We have the experience to help protect your rights.
Source: Forbes, “IRS Hunts Debit Cards For Tax Evasion, As Court Approves John Doe Summons,” Robert W. Wood, Jan. 25, 2017