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IRS can seek Amex, MasterCard records in offshore probe

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WASHINGTON (CNN) -- A federal judge in Miami agreed Monday to an unusual effort by the Internal Revenue Service to serve summonses on two credit card companies, MasterCard International and American Express, as part of an investigation into suspected tax evasion.

The order could open the credit card records of thousands of U.S. consumers to IRS scrutiny.

The IRS, working with the Justice Department, requested the summonses a more than a week ago as part of a long investigation into tax evasion. Credit and debit cards have become a popular way to access offshore bank accounts that might not be reported to the IRS as required by law.

Offshore banking experts estimate such accounts cost the U.S.Treasury $70 billion a year in lost tax revenue.

The IRS probe involves Americans who deposit taxable assets in bank accounts on Caribbean islands -- the Caymans, the Bahamas, Antigua and Barbuda -- taking advantage of bank secrecy laws.

In his order Monday, Judge Adalberto Jordan wrote, "the information to be obtained from the examination of the records -- and the identities of the persons with respect to whose liability the summonses are issued -- is not readily available from other sources."

In a statement, MasterCard said it "cannot comment" on the judge's order because the company has not seen it. However, MasterCard said it has a "long history" of cooperating with governmental agencies and "will evaluate whether we have, and are able to provide any of the requested information."

Calls to American Express for comment were not immediately returned.

The IRS wants to compare the credit card reports with tax records.

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