Mark Matthews Comments on IRS Credit Card Initiative and Swiss Bank Program for Offshore Compliance
At a recent panel discussion sponsored by ALI CLE International Trust and Estate Planning, Caplin & Drysdale's Mark E. Matthews commented on the possibility that the IRS may revive its offshore credit card project as part of the Service's offshore tax compliance initiative. For the full story, please visit Tax Notes' website (subscription required).
Excerpt taken from the article "IRS May Revisit Credit Card Initiative for Offshore Compliance" by Nathan J. Richman and Andrew Velarde for Tax Notes.
Mark E. Matthews of Caplin & Drysdale Chtd. recalled his time in government during the earlier credit card project, which goes back to 2000. While the government originally expected that the information would lead to easy pickings, the result was a lot of legwork to piece together account holder identities, he said, adding, "It became a much more labor-intensive, painstaking job."
McDougal described how, in the original credit card project, the IRS served John Doe summonses on the major credit card companies regarding banks in the Bahamas, Antigua and Barbuda, and the Caymans. The responses included a large number of transactions, many of which did not have names attached, requiring large amounts of legwork and analysis to assemble account holder activity in order to identify the account holders. Even though the results didn't come as easily as Matthews had expected, McDougal said, "If you count not only the cases that we identified, but the ones where the records were useful in the prosecution, we were told by [Criminal Investigation] that there were 500 cases that were either found or improved by these records."
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Matthews said that while the Swiss bank program has been successful, it also involved more effort than anyone expected beforehand. Because of this, he does not expect another version of the program in the future. The government is also about to receive large amounts of information on so-called leavers -- who moved funds from Swiss banks to other offshore accounts -- from non-prosecution agreements under the Swiss bank program, he said. "If there seems to be a special place in hell, in the Justice Department's mind, for people, it is for people who moved banks," he said.