As reported by theÂ ny times -Â Â The US government isÂ expanding its investigation into “offshore tax evasion” to include services sold by a large processor of credit card transactions.
The Internal Revenue Service has asked a Federal District Court to order First Data to reveal account information onÂ merchants that sell offshore services such as financial transaction processing.
The summons, if approved, wouldÂ force the company to IDÂ US clients who, through an offshore credit card, offshore debit cardÂ or other unspecifiedÂ financial processing methods, â€œmay have diverted unreported income offshore or received unreported income from undisclosed offshore sources or have taken improper deductions or credits or have failed to withhold tax on certain payments made offshore,â€ all going back to 2002.
The I.R.S.Â is claiming that First Data has marketed and sold offshore services toÂ US merchants –Â offshore service providers, who in turn used First Data’s service to help their clients hide what otherwise would be taxable income.
First Data spokesperson Ms. Goeson said, â€œwe have an excellent track record of cooperating with all government agencies and expect to continue our practice of complying with all lawful requests for information with due regard for the confidentiality of our customersâ€™ data.â€
The I.R.S. investigation seems to be targeting aÂ subsidiary known as First Data Independent Sales. The subsidiary,Â which works with 3,200 independent sales offices and agents, began pushing offshore processing servicesÂ through a web compay from Bermuda called First Atlantic Commerce.
First Data, according to the I.R.S.,Â â€œclearly markets offshore merchant account services to U.S. merchants as a means of tax avoidance by advertising its services on the Web sites of foreign promoters of abusive offshore tax schemes and products.â€
The declaration claimsÂ processing and settling functions of theÂ credit card transactions were performed byÂ First Data Merchant Services.
Mr. Reeves is the lead investigator of the I.R.S.â€™s efforts to examine offshore credit card abuses.
In the past, the I.R.S. issued a summones to eBay, Visa International, andÂ Mastercard.Â The agency wasnt able to convince manyÂ clients with credit cards linked to offshore accounts to surrender their identity.Â However, theÂ IRS is now broadening its focus to include merchants.
ed note: The timing of this press release is highly suspicious and bordering on obvious scare tactics.Â This story with the cooperation of the nytimes was released to the public on tax day, April 15th in the US.Â The Revenuers are getting more desperate in their efforts to intimidate the populace into compliance it would seem.