US Seeks To Help Norway Obtain Tax Information

By Editorial 30 July, 2013

The United States Department of Justice (DOJ) has announced that several federal courts have authorized service of John Doe summonses on American financial institutions to obtain information on persons who may be attempting to hide their Norwegian taxable income.

The DOJ classified the lawsuits as "part of ongoing international efforts to stop persons from using foreign financial accounts as a way to evade taxes." Courts have previously approved John Doe summonses allowing the Inland Revenue Service (IRS) to identify individuals using offshore accounts to evade their US tax obligations. In the present suits, the DOJ is seeking information on people that have used specific credit or debit cards in Norway and to determine whether those people complied with Norwegian tax laws.

The request of the Norwegian government has been initiated under the tax treaty between Norway and the US, which allows the two countries to cooperate in exchanging information that is helpful in enforcing each country's tax laws.

Federal courts in Minnesota, Texas, Pennsylvania, Oklahoma, Virginia and California have recently entered orders requiring the IRS to serve the summonses on certain US banks and financial institutions. While orders have been entered in seven of these cases, the DOJ's petitions in three additional cases remain pending.

As alleged in court papers filed by the DOJ, the Norwegian authorities have reason to believe, based upon the use of payment cards in Norway that were issued by US banks, that unidentified card holders may have failed to report financial account information or income on their Norwegian tax returns. Court papers cite examples where individuals using non-Norwegian payment cards have claimed to be tax residents of other countries but were found to have resided in Norway for sufficient time to subject them to taxes in Norway.

A total of 18 US financial institutions are identified in the government's court filings. The filings do not allege that these financial institutions have violated any US laws with respect to these accounts.

"The DOJ and the IRS are committed to working with our treaty partners to fight tax evasion wherever it occurs," said Kathryn Keneally, Assistant Attorney General for the DOJ's Tax Division. "All taxpayers should know that our efforts in this area are global, coordinated and will continue."

"These summonses reflect our continuing efforts to work with our international partners on offshore tax evasion," said Douglas O’Donnell, IRS Assistant Deputy Commissioner, Large Business & International. "By using effectively our existing network of bilateral agreements, countries can help one another put an end to the global practice of evading taxation by hiding assets abroad."

Tags: Individuals | Court | Compliance | Tax | Tax Compliance | Law | Banking | Norway | Offshore | Agreements | United States | Individual Income Tax | Expats |


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