What is a John Doe Summons?

Federal law requires U.S. taxpayers to pay income tax on all earnings worldwide.  U.S. taxpayers are also required to report to the IRS any foreign financial accounts if the value of those accounts exceeds $10,000 at any time in a calendar year.

U.S. taxpayers seeking to hide their assets in offshore accounts can use the services of companies that open foreign accounts, create false corporations or other entities and serve as nominee officers.

In order to obtain a list of customers who use these companies, the IRS issues a John Doe summons, which allows the IRS to get the names of all taxpayers in a certain group.

One company that received an IRS John Doe summons was Sovereign Management & Legal (SML), a Panamanian company run by Michael Behr of Bozeman, MT. It’s alleged that SML advertises several different “packages” which allow taxpayers to hide assets offshore.  One of these “packages” includes creating corporations owned by other entities (including fake charitable foundations), which are all held in the name of the nominee officers of SML.  SML then opens bank accounts for these entities and provides debit cards in the name of the nominee to the taxpayer. By using these debit cards, the taxpayer can access their funds without revealing their identity.