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IRS targets offshore bank credit cards

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  • IRS targets offshore bank credit cards

    I'm certainly one of the lesser lights here on the forum but thought this article in the Oct.31 USA Today (moneyline section) worth addressing.

    IRS efforts target offshore bank credit cards
    by Greg Farrell
    USA TODAY

    A federal judge gave the Internal Revenue Service permission to demand from American Express and MasterCard the names of U.S. citizens with cards issued by banks in offshore tax havens.

    The IRS said the sweeping effort is one its biggest ever in search of billions of dollars believed stashed offshore. Judge Adalberto Jordan in Miami OK'd an IRS motion Monday to seek names of card holders it thinks are hiding wealth and using cards to tap it. The accounts are legal if properly reported.

    The scope of the demand however, caused privacy advocates to worry. Spokeswomen for American Express and MasterCard say the companies will look closely at the expected summons before deciding whether to comply.

    At isue is a type of card offered by banks in Antiqua and Barbuda, the Caymans and the Bahamas. The IRS says this is how they work.

    >They require the card holder to keep a large account in the issuing bank.
    >They work like debit cards, with the bill paid directly from the account
    >Even if the cards are used in the USA, because they were issued offshore, there is no record here of the purchases.

    "What's clever about this is that it gets around the problems of having to go down, get your cash and bring it back" says ex-FBI agent Ted Fraumann, now a security consultant at Stroz Associates. And it's what the IRS hopes to spot in the card records,

    "The average person doesn't need an offshore credit card" says Dale Hart deputy IRS commissioner. "It costs you money to have credit and debit cards overseas and there are fees associated with it. You have to wonder, with all these downsides, what's the upside? Tax evasion. This is about tax evasion not about taxpayers. We've been very narrow in how we structured this request. We've asked only for info on U.S. citizens who have these types of accounts in these three countries."

    How many Americans are avoiding taxes this way? That's what the IRS is trying to find out, and it believes cards have increased the numbers.

    "A generation ago you had to know somebody, have a contact, to hide your money offshore" says Jack Blum, a Washington tax attorney working with the IRS. "Today it's been democratized. It goes much further.

    But a privacy advocate says the decision also highlights an ongoing concern.

    "At a time when there's more and more private sector collection of information, private sector companies don't always have control over who has access to that information" says David Sobel, general counsel for the Electronic Privacy Information Center.

    The IRS knows an attempt to rifle through citizens' credit bills will raise privacy jitters, but insists it's only interested in tax cheats among them.

    "This is about tax evaders, not taxpayers", says the IRS' Hart. "We know what's going on, but what we don't know is how much is out there."
    _ _ _ _ _ _ _ _ _ _

    Anyway.....I thought everyone here might be interested.....


  • #2
    thought I'd put this back "on top" so everybody has a chance to see it. lol

    Comment


    • #3
      This is a hideous move from a "democratic" government that is supposed to represent its people.

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      • #4
        Cons,

        You are right about that. This is a disgrace.

        Comment


        • #5
          Very interesting.

          Thats why you should NEVER get a Visa,MC tied in with your OS account.

          I would definitly report it to the IRS But why go through this hassle of being investigated because of your OS bank cards?

          MV

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