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Two IRS Groups to Assist Criminal Investigators in Case Selection

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Posted on May 31, 2018 |

The Internal Revenue Service has been focusing in recent years on cracking down on taxpayers who hide assets offshore in order to avoid paying taxes. There have been numerous programs undertaken, including the Offshore Voluntary Disclosure Program and the Swiss Bank Program, to attempt to identify U.S. affiliated taxpayers with funds kept in foreign financial institutions.

The OVDP program encouraged taxpayers to come forward and voluntarily disclose previously undeclared offshore accounts accounts they were supposed to have reported, while the Swiss Bank Program encouraged banks to come forward and provide details on taxpayer accounts. In both the OVDP and Swiss Bank Program, reduced penalties were offered in exchange for voluntary disclosure.

These programs were intended to serve as an enticement for taxpayers to come forward by rewarding them with lesser consequences. However, the IRS has also announced it will be stepping up efforts to identify tax law violators and bring criminal charges. In fact, in August 2017, the IRS announced two new enforcement initiatives for 2018. Those initiatives are now up-and-running.

With new IRS efforts to harness data to increase the number of criminal prosecutions occurring, it is now more important than ever for taxpayers to talk with a Boston criminal tax lawyer about proactive actions that can be taken to reduce the likelihood of an IRS enforcement action.

IRS Launches Two New Enforcement Programs

One of the two new enforcement programs the IRS launched in 2018 is called the International Tax Enforcement Group (ITEG). This group is specifically dedicated to using data analytics to identify and prosecute individuals and organizations that have invested funds offshore and failed to disclose those funds in order to avoid paying taxes on income.

The International Tax Enforcement Group is making use of data from OVDP, as well as from foreign banks required to make reports under tax treaty exchanges. It is also reviewing information from the Panama Papers, which was a major leak of information from a Panama law firm that played a pivotal role in helping many offshore investors to hide accounts from local taxing authorities. They'll also be focusing on offshore debit cards as well as cryptocurrency accounts that could potentially be used to hide funds.

By using this information, they'll be helping the IRS Criminal Investigation Division to find and pursue cases against taxpayer who failed to file their required Reports of Foreign Bank and Financial Accounts, as well as other taxpayers with undeclared offshore income.

The National Coordinated Investigations Unit is the other new enforcement program the IRS has launched. Its focus is on finding questionable refunds and identifying tax preparers who manipulate client returns to reduce tax liability. NICU will also be using data analytics, just as the International Tax Enforcement Group is, in order to identify taxpayers not in compliance with trust administrator rules.

According to the chief of the IRS Criminal Investigation (CI) division, these new programs are both up and running now and a significant increase in criminal cases is the likely result. A Boston criminal tax lawyer can provide help if you are one of the individuals caught up in the IRS new investigation efforts. Contact attorney Kevin Thorn today.

For a consultation, contact Kevin E. Thorn, Managing Partner, at ket@thornlawgroup.com or (617) 692-2989


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