By Megan L. Brackney
Journal of Passthrough Entities
May – June 2017 Edition
“John Doe” summonses have been in the news again.[1] On January 24, 2017, a federal district court unsealed an order authorizing the Department of Justice (DOJ) to serve a John Doe summons upon a third party to obtain information about U.S. taxpayers who may hold offshore accounts established by Sovereign Management & Legal LTD, a Panamanian Entity.[2] The John Doe summons sought records of U.S. taxpayers who had been issued debit cards that could be used to access funds in such a manner as to hide assets offshore. Previously, another federal court authorized John Doe summonses on eight entities, including FedEx, DHL, UPS, Western Union and HSBC USA, for records that would assist the IRS in identifying U.S. taxpayers who used Sovereign’s services to establish or maintain foreign financial accounts or other offshore assets.[3] On November 30, 2016, another federal district court authorized DOJ to serve a John Doe summons on Coinbase, a virtual currency exchanger on the grounds that convertible virtual currency,[4] such as Bitcoin, is difficult to trace and there is a reasonable basis for believing that some virtual currency users have failed to comply with federal tax law. [5]
