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Summonses Issued in Tax Evasion Case

Articles/News, Offshore Account Update

Posted on January 30, 2015 |

Sovereign Management & Legal LTD is a company that the United States government believes helped U.S. citizens evade their income tax obligations. The U.S. government does not yet know who used the services of Sovereign to move money and assets offshore to hide them from the Internal Revenue Service and avoid paying income taxes that were due. Authorities are trying to uncover the identities of those who failed to pay all required taxes, and a U.S. district judge in a federal court in Manhattan has just helped the government to take a step forward in these efforts.

Preventing tax evasion and identifying those who hide assets offshore has become a top priority for the Internal Revenue Service, the Department of Justice and state authorities.  The recent investigation into investors who may have been involved with a tax-evasion scheme using Sovereign is just one example of many legal actions that authorities have taken in recent years. More and more citizens with undeclared offshore accounts can expect to find themselves under investigation as well.

If you believe you may have a legal problem with the IRS, you do not want to wait until the government knocks at your door. There may be voluntary disclosure options and other ways to be proactive and try to avoid criminal sanctions. An experienced Boston IRS attorney should be consulted for help exploring your legal options.

John Doe Summonses Aim to Identify Tax Evaders

Authorities believe that Sovereign Management & Legal LTD helped individuals to establish foreign entities like foreign corporations, trusts and foundations in order to be able to move money and assets into offshore accounts without the government’s knowledge. The creation of these entities was allegedly designed to make it harder to trace money and make it easier for investors to avoid paying all taxes on income earned.

Sovereign also allegedly helped U.S. citizens to open accounts at banks in places like Panama and Hong Kong and then move funds into the accounts offshore. Taxpayers are required to file FBARs for offshore accounts to ensure that the IRS is aware of the money and assets, but the IRS believes that the people who opened these accounts with Sovereign were not fulfilling their obligations.

The IRS does not know exactly which taxpayers are involved in soliciting Sovereign’s services to hide money, but the government wants to find out. As a result, they sought so-called John Doe summonses. The purpose of these types of summons is to obtain information that can be used to identify people who engaged in criminal acts like tax evasion.

The summonses have been issued to compel many large U.S. companies to provide authorities with information that will reveal taxpayer identities.  For example, summonses will go to UPS, FedEx, Western Union, the Federal Reserve Bank of New York, the Clearing House Payments Company and DHL.  These companies are believed to have been used by Sovereign and the investors to communicate and correspond, and/or to have facilitated the transfer of money.

If and when these companies provide information, the government is likely to go after the individual taxpayers. The government has been aggressive at prosecuting not just banks and bankers but also investors. If you have any money in an offshore account and haven’t followed the rules, you could end up the subject of the government’s next probe and could find yourself facing criminal charges.

It is better to be proactive than reactive when dealing with IRS problems. Contact a Boston IRS attorney to learn about your legal options if you have concerns about a potential tax invasion investigation. Let an IRS Attorney with extensive experience in Undisclosed Offshore Accounts help.  Kevin E. Thorn, Managing Partner of the Thorn Law Group, can help limit your exposure to substantial civil penalties and possibly a criminal investigation.

For a consultation, contact Kevin E. Thorn, Managing Partner, at ket@thornlawgroup.com or (617) 692-2989

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