IRS Seeks Customer Records From AOL, EBay in Offshore Tax Probe
By Ryan J. Donmoyer
Washington, Aug. 29 (Bloomberg) -- The Internal Revenue Service went to court to force dozens of companies, including AOL Time Warner Inc., EBay Inc. and AMR Corp.'s American Airlines to surrender information on customers the tax collector suspects are hiding income in offshore bank accounts.
The tax agency is seeking records from airlines, hotels, rental car companies, retailers, Internet companies, and shipping companies, including Delta Airlines Inc., Ramada Inc., Cendant Corp.'s Avis Rent a Car Inc., Amazon.com Inc., the Gap, Inc., DHL Worldwide Express, and AT&T Corp. The companies are not the target of the investigation, the IRS said.
The summonses filed in federal courts in seven cities mark the first attempt by the IRS to review documents from companies whose wares or services were purchased with credit cards linked to offshore accounts. The action comes after the tax collector forced credit card issuers Visa International Inc., MasterCard Inc., and American Express Co. to turn over information on cardholders in Antigua and Barbuda, the Bahamas and the Cayman Islands.
``In U.S. District Courts across the country, the IRS is moving forward with its effort to combat offshore tax evasion,'' IRS Commissioner Charles Rossotti said. ``In the weeks and months ahead, the IRS will work aggressively to pursue offshore credit card holders who are not paying their fair share of taxes.''
The summonses were filed in Atlanta, Chicago, Dallas, San Francisco, Seattle, Newark, New Jersey, and Alexandria, Virginia. Other companies affected include UAL Corp.'s United Airlines; Southwest Airlines Co.; Ford Motor Co.'s Hertz Corp.; Mary Kay Corp.; and Sabre Holdings Corporation.
Credit Purchases
The summonses were prompted by transaction information the tax agency got from MasterCard and American Express in the last year. In some cases the IRS doesn't know the name or address of the cardholder; that is what the agency is seeking from the merchants, said Dale Hart, deputy commissioner in the agency's small business and self-employed division.
For example, the IRS may ask a rental car company for the name and address of the individual who used a credit card linked to an offshore account to rent a car, Hart said. It may seek the home address entered with Amazon.com or EBay. The merchants themselves have done nothing wrong, she said.
``We have no reason to expect that these companies would be anything less than cooperative,'' said Hart, who added the IRS was seeking only limited information.
Two weeks ago the Justice Department asked a Miami federal judge to let the IRS examine MasterCard's files of credit cards issued by banks in more than 30 countries that are either tax havens or permit secret bank accounts. Included are Switzerland, Liechtenstein, Belize, Bermuda and St. Kitts and Nevis.
The Treasury loses between $20 billion and $40 billion in tax revenue each year because of offshore accounts used by 1 million to 2 million people, according to the General Accounting Office, the congressional auditing agency. Only 117,000 Americans disclosed they had offshore accounts in 1999, the last year for which statistics are available, the IRS said. |
