Tycoon: “IRS Violated Bermuda Treaty”

An Australian-born business tycoon is embroiled in a legal dispute with the US Internal Revenue Service over documents the American authorities received from Bermuda officials concerning his family’s global business dealings.

Peter Lowry [pictured], co-chief executive of Australia’s Westfield Group, has been told by the IRS he must lodge a new request under US freedom of information laws if he wants access to documentation about his financial affairs handed over by Bermuda.

The rebuff comes 18 months after Mr. Lowy, who is based in California, launched court action in that state in an attempt to get the US Internal Revenue Service to hand over material it had accumulated during an investigation into the Lowy family’s tax affairs.

The Australian-Israeli Lowy family’s Westfield Group operates more than 100 shopping centres in Australia, New Zealand, the United States and Great Britain. Peter Lowy, now an American citizen, lives in Beverly Hills and is head of the US division of the Westfield Group

The latest legal setback comes two months after Mr. Lowy accused the IRS of ”clear contradictions and puzzling obfuscation” regarding certain documents it sent to the Australian Tax Office in late 2009.

The “Sydney Morning Herald” reported today [Oct. 12] that Mr. Lowy’s US lawyers have asked a California judge to examine some of the documents the IRS refuses to release, but the IRS said it has adequately explained the reasons.

Mr. Lowy’s lawyers have suggested the transfer of documents by the IRS to the Australian Tax Office in 2009 may have violated a United States-Bermuda tax treaty.

“In submissions to the US District Court in northern California, Mr Lowy’s lawyers suggested the IRS did not want to say exactly what went to the ATO ”because it does not want to explain a transfer of these documents to Australia that would violate the [Bermuda] treaty’,” the newspaper said.

“Mr. Lowy’s original freedom of information request was filed in October 2008, about three months after a US Senate committee dramatically revealed the Lowys were suspected of cross-border tax evasion.”

There were two investigations under way at that time: one by the US Senate committee examining the use of offshore tax havens, and one initiated by the IRS.

“The IRS said that information it has received from Australian tax authorities must, under
the terms of the two countries’ formal treaties, remain secret,” reported the “Sydney Morning Herald.”

“But Mr Lowy’s US lawyers claim the IRS is refusing to release documents that do not fall under the US-Australian tax treaties, namely, documents it received from Bermuda in June, 2009.”

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