According to Law360, a third-party IRS summons on a U.S. citizen's bank records for an investigation into a French company's tax liabilities in France violates federal tax laws because it's not connected to a U.S. debt, an Indiana federal court has been told.
The summons, issued to JPMorgan Chase & Co. seeking Joseph Dadon's bank records, should be quashed because it violates the Internal Revenue Code by requesting information on a tax liability not connected with the U.S., Dadon told an Indiana federal court in an amended petition filed Tuesday.
Under IRC Section 7602(a) , a summons can be issued to determine only if a person owes the U.S. taxes, Dadon said.
The IRS issued the summons to get information on potential value-added taxes that the French company, Société Française de Négoce International, owed the French government, and such a summons is not authorized by U.S. law, Dadon argued. The summons “was not issued in connection with any investigation relating to taxes due to the United States,” the petition said. The case is Joseph Dadon v. U.S., case number 1:19-cv-03862.
But Mr Dadon's attorney must not have read our May 21, 2019 post "Another IRS Summons on Behalf of a Foreign Government" where we discussed that on March 13, 2018 we posted District Court upholds Another IRS Summons Issued Pursuant to a Tax Treaty Request discussing that a district court had upheld a summons that IRS issued to an American law firm, pursuant to a request from the French tax authorities, with respect to transfers of funds made by an alleged French citizen to a client trust account maintained by the law firm. (Franck Hanse v. US, Case No. 1:2017cv04573).
Furthermore, we previously posted on August 1, 2013 Federal Courts Authorize John Doe Summonses Seeking Identities of Credit Card Use For Norweign Tax Authority! where we discussed that federal courts in Minnesota, Texas, Pennsylvania, Oklahoma, Virginia and California had entered orders authorizing the Internal Revenue Service (IRS) to serve John Doe summonses on certain U.S. banks and financial institutions, seeking information about persons who have used specific credit or debit cards in Norway.
We also discussed how the DOJ, petitioned the U.S. District Court for the Western District of North Carolina to authorize IRS summonses to uncover the identities of Finnish residents using U.S.-issued payment cards in Finland. The DOJ and IRS are pursuing this matter under the U.S.-Finland tax treaty and at the request of the Finnish government.
“Our continued success in combatting Offshore Tax Noncompliance has been helped by the Assistance We Receive through the Network of Tax Treaties Around the Globe,” said IRS Commissioner Charles Rettig.
“Yesterday’s effort reflects that the U.S. will return this help by working under the law with tax administrators in other nations to help them in their fight against tax evasion and avoidance. A global economy should not be allowed to serve as a possible vehicle for tax evasion in any country.”.
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