YOU ARE HERE: LAT HomeCollections


IRS Seeks More Records in Tax-Evasion Probe

Investigation: The agency wants credit card transactions from more than 40 companies.


The government's ongoing tax-fraud dragnet widened on Thursday, with tax authorities requesting customer information from a wide array of companies, including American Airlines and America Online.

The action, which involved filing legal papers in federal courts in seven cities, was the latest in a series of legal summonses aimed at ferreting out Americans suspected of hiding assets overseas to illegally evade income taxes. The Internal Revenue Service believes that U.S. citizens access overseas cash through credit cards issued by offshore banks, and has pressed successfully for credit card transaction information from Visa International Inc., MasterCard Inc. and American Express Co.

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. The agency believes that the companies accepting the credit cards will have gotten identifying information from the users, such as driver's license numbers, names and signatures.

The IRS is seeking credit card transaction records from more than 40 companies, including all the major airlines, as well as major hotel chains, car rental companies, online service providers and retailers including Hammacher Schlemmer & Co., Nordstrom Inc. and cosmetics giant Mary Kay.

The summonses were filed in Alexandria, Va.; Atlanta; Chicago; Dallas; Newark, N.J.; San Francisco and Seattle.

These companies are not suspected of wrongdoing, government officials stressed. They are simply believed to have information pivotal to ongoing IRS examinations.

The Treasury loses $20 billion to $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.

Bloomberg News was used in compiling this report.

Los Angeles Times Articles