SDNY Issues Latest Required Records Decision

The Honorable William H. Pauley III of the United States District Court for the Southern District of New York has issued the latest opinion applying the “Required Records Doctrine” in the context of a foreign bank account case.  See In re Various Grand Jury Subpoenas, No. 12 Misc. 381 (S.D.N.Y. Feb. 19, 2013) (Bloomberg article here).  In that case, the government caused grand jury subpoenas to be served on a number of individuals requiring production of foreign bank account records.  The taxpayers resisted production of the records, asserting the act of production privilege against self-incrimination under the Fifth Amendment.  The government, in response, argued that the Required Records Doctrine applied and precluded any Fifth Amendment assertion.  The district court agreed with the government, finding that the Required Records doctrine applied and ordered the taxpayers to comply with the subpoenas.  In doing so, the SDNY has joined a growing number of federal courts which hold that foreign bank account records required to be maintained under the Bank Secrecy Act are subject to the “Required Records” doctrine.  To date, the Fifth, Seventh, Ninth, and Eleventh Circuits have ruled uniformly on this issue in the government’s favor.  While these decisions greatly assist the government in its continuing crackdown on offshore tax evasion, the taxpayer in the Seventh Circuit case has filed a petition for a writ of certiorari in the Supreme Court, and it remains to be seen if the high court will review this controversial area of the law.

One thought on “SDNY Issues Latest Required Records Decision

  1. Pingback: U.S. Supreme Court Considers “Required Records” Case | Tax Controversy Watch

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