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Speech Highlights DOJ Priorities, Employment Tax Evasion

Offshore Account Update

Posted on December 23, 2015 |

The Department of Justice has a tax division that investigates tax evasion and pursues cases against tax evaders.  Recently, the acting Assistant Attorney General (AAG) made a keynote speech at a continuing legal education event that was being held by the American Law Institute.  The contents of her speech explained the current DOJ priorities, which include a continued crackdown on offshore accounts as well as a renewed focus on employment tax evasion.

A Boston business tax attorney can provide assistance to your organization if you are concerned that your business could become a target of a DOJ investigation based on evasion of employment taxes. The DOJ's criminal tax manual has been updated in connection with 26 U.S.C. Section 702, which is the federal law imposing serious criminal penalties in situations where taxes are not collected and paid. 

Businesses need to know how these new enforcement efforts could put them at risk if not in full compliance with tax requirements.  Both individuals and organizations should also explore options for amnesty for voluntary reporting and should speak with an attorney about ways in which they can reduce potential consequences of tax noncompliance.

What Types of Tax Evasion Will the DOJ be Focused On?

Employment tax evasion has long been listed as a priority, but the DOJ has now teamed up with the Internal Revenue Service and is moving forward with aggressive efforts to go after employers who are not in compliance with tax withholding and payment requirements. 

The IRS will take both civil and criminal action, and the DOJ and IRS are engaging in activities including new training of IRS agents and DOJ lawyers in employment tax evasion issues. The Department of Labor has also indicated a new push to go after employers evading tax obligations through the misclassification of workers. 

Offshore tax accounts will also continue to be a major priority for the DOJ, and the AAG has made clear that when the Swiss Bank Program ends, efforts will continue to pursue cases against banks who facilitate offshore tax evasion and against individuals who do not report their foreign accounts. Enforcement has extended far beyond Switzerland and banks worldwide have been participating in the Swiss Bank Program, which allows institutions to limit penalties in exchange for providing information on U.S. accountholders. 

The AAG also discussed the Foreign Account Tax Compliance Act (FATCA), which has been challenged numerous times in court and has been repeatedly defended by the DOJ. FATCA has not only been upheld, but more countries including India have recently entered into agreements with the U.S. to implement FATCA.  Contact Boston tax attorney Kevin Thorn for assistance with ensuring you are in compliance.

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

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