posted on April 11, 2006 04:52:30 PM
more from WSJ
.S. Seeks PayPal Customer Data
In Attempt to Find Tax Evaders
By ROB WELLS
April 12, 2006
The Justice Department has asked PayPal Inc., the online-payment-processing unit of Internet auctioneer eBay Inc., to turn over some customer records as part of a tax-evasion probe, a top tax official said.
U.S. District Judge James Ware in the U.S. District Court for the Northern District of California in February issued a "John Doe" summons to PayPal, of San Jose, Calif., for the records.
Eileen J. O'Connor, assistant attorney general for the Tax Division, mentioned the summons to reporters during a news conference on tax-enforcement trends. A "John Doe" summons permits the Internal Revenue Service to obtain information about possible tax fraud by people whose identities are unknown.
Ms. O'Connor said the request is part of a Justice Department and IRS investigation of possible tax evasion by U.S. taxpayers using credit cards issued by offshore banks. An estimated $40 billion dollars in federal tax revenue is lost every year because of the use of credit cards linked to accounts held in foreign tax havens, according to the Treasury Inspector General for Tax Administration.
The government made similar requests of MasterCard International Inc., Visa International and American Express Co. in 2000 and 2001. It has sought payment information from 141 merchants. "This is just fact-finding by the IRS," Ms. O'Connor said. "PayPal is one of the mechanisms by which money stashed overseas might be spent."
The summons requires PayPal to provide account and transaction records relating to U.S. taxpayers with MasterCard, Visa and American Express cards issued by banks based in tax-haven countries. The request covers Dec. 31, 1999, through Dec. 31, 2004. PayPal spokeswoman Amanda Pires said the company is evaluating its options. She said the request covers banks based in 35 countries, yet PayPal is available in only 10 of those countries.
In a court filing, the Justice Department said foreign countries such as Antigua, Luxembourg, Panama and Switzerland have bank-secrecy laws that compel U.S. investigators to seek records from other sources, such as credit-card issuers.
The IRS and the Justice Department contend about 72% of taxpayers reviewed through its "Offshore Credit Card Project" examinations in 2005 had underpaid their taxes by using offshore payment cards and bank accounts.
posted on April 11, 2006 08:46:54 PM
Don't panic - it's what's known in the trade as a "fishing expedition" (as opposed to the "phishing attempts" we all get daily) and most appeal court judges will strike them down for lack of evidence.
Loads of wealthy USA citizens use credit/debit cards to access funds held in offshore bank accounts so this wasn't totally unexpected. Fortunately most offshore bank have for a long time issued credit/debit cards without names on them...
posted on April 12, 2006 05:44:15 AM
Agit said-
Loads of wealthy USA citizens use credit/debit cards to access funds held in offshore bank accounts so this wasn't totally unexpected. Fortunately most offshore bank have for a long time issued credit/debit cards without names on them...
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Thats why they come to Paypal for the missing Link!
/ lets all stop whining !! /
