"Deja vu all over again" is of course a Yogi Berra phrase. And it may well describe what is about to happen with John Doe summonses and offshore accounts.
A John Doe summons is a summons where the name of the taxpayer who is being investigated is not known. The highest profile example in recent years involving the IRS was in 2008, when U.S. authorities began their concerted campaign of stepped-up offshore account enforcement. After a judge signed off on a John Doe summons, the Swiss banking giant UBS ended up having to pay hundreds of millions of dollars to the IRS and had to give up the names of thousands of U.S. account holders.
Well, here we go again, it seems. The IRS has now received court approval to issue similar subpoenas to several other leading banks, seeking information about U.S. taxpayers with undisclosed foreign accounts.
Switzerland is by no means the only country affected this time. The John Doe summonses issued by the IRS seek information about accounts in numerous locations around the world. They range from the Caribbean (the Cayman Islands) to the Mediterranean (Malta) and the South China Sea (Hong Kong).
Not surprisingly, Switzerland is included as well.
Obviously the IRS is casting a wide net by issuing these John Doe summonses. The net is certainly wide geographically, as we sketched above. But it is also wide procedurally because a John Doe summons goes after not merely a specific taxpayer with a known identity, but after all taxpayers in a group the IRS has specified.
Naturally it will take some time for the banks that have received the summonses to respond to them. And the IRS will need to review the data once it is received. But if more offshore acount tax evasion prosecutions are coming, it will definitely be deja vu yet again.
Source: Forbes, "IRS Issues John Doe Summonses To Citibank, Chase, BoA, Mellon, HSBC---Tax Prosecutions Coming," Robert W. Wood, Nov. 13, 2013