A Federal Court in California has authorized the IRS to summon the FirstCaribbean International Bank (FCIB) for information on American account holders who may hold offshore accounts there. The Barbados-headquartered bank, on which the authority was made to serve the summons, was identified by the Department of Justice as the Canadian Imperial Bank of Commerce FirstCaribbean International Bank .
In response, the bank through its Director of Corporate Communications in Barbados, Debra King has issued a statement saying they “are committed to complying with all laws and regulatory requirements". King further added, "It is our intention to cooperate with authorities in accordance with the respective laws of all jurisdictions involved". At the same time, the bank has communicated with US bank Wells Fargo, their correspondent bank to “understand the nature of the order”.
King’s response was copied to the Managing Director Nigel Holness in the bank’s head office in Kingston. It is unclear how the Jamaican branches of the bank will be affected by the order. The summons by the IRS seeks records of FCIB's United States correspondent account at Wells Fargo NA and allows the IRS to identify US taxpayers who hold interests in financial accounts at FCIB and other financial institutions that used FCIB's Wells Fargo correspondent account both presently and in the past.
The summons was issued by the Court arising from a petition by the US government and is known as a John Doe summons, the name commonly given to a summons on unknown persons who may have violated internal revenue laws.
FCIB is based in Barbados and has branches in 18 Caribbean countries. Although FCIB itself does not have US branches, it maintains a correspondent account in the US at the San Francisco-based Wells Fargo Bank NA.
In support of the summons, IRS agent Cheryl R. Kiger lodged a declaration stating that the IRS discovered US taxpayers were using FCIB to help them keep their offshore accounts undetected by the IRS and avoid paying US federal income tax on money placed in those offshore accounts. The Justice Department said Kiger's declaration describes her review of the information submitted by more than 120 FCIB customers who participated in the IRS's Offshore Voluntary Disclosure Programme.
Kiger’s declaration went on to say that many unidentified John Doe account holders "may have been under-reporting income, evading income taxes, or otherwise violating the internal revenue laws of the United States".
Commenting on this matter, Kathryn Keneally, assistant AG for the Treasury Department’s Tax division said, “This John Doe summons is a visible indication of how we are using the many tools available to us to pursue this activity wherever it is occurring. Those who are still hiding should get right with their country and their fellow taxpayers before it is too late.”