The offshore banking system of Belize has for a while been slowly taking over the airwaves and today, that banking sector is wading troubling waters says the Internal Revenue Service IRS of the United States. A report published today revealed that a federal judge has issued an order allowing the IRS to serve a John Doe summons to reveal Americans with offshore accounts in Belize. The report says the IRS wants to know who has accounts at the Belize Bank International Limited, Belize Bank Limited, and others, but that the order entitles the IRS to get records of correspondent accounts at Bank of America and Citibank. Citibank will need to produce records identifying U.S. taxpayers with accounts at BBL, BBIL, and affiliates, including correspondent accounts to service U.S. clients. Transactions in correspondent accounts leave trails the IRS can follow. The IRS obtains records of money deposited, paid out through checks, and moved through the correspondent account through wire transfers.
Of interest is that in April of this year, Bank of America, the second largest bank in the US, severed its correspondent banking relations with the Belize Bank, cutting off its wire transfer services to its customers. And while this move may be seen as part of the continued financial tightening in the US to combat tax evasion and money laundering, many investors and business people say the move will cripple Belize's offshore programs more than it has already. The questions now remains, with Belize Bank targeted, are the other banking institutions just sitting ducks? We’ll keep monitoring this story.
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