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News and Events

More People May Face Criminal Prosecution Thanks to IRS Initiatives

Hot Topics, News

Posted in on May 31, 2018

If you have undeclared offshore financial accounts or if you are otherwise not in full compliance with tax laws, it's more important than ever you talk with a Maryland criminal tax lawyer about options you have for taking proactive action to reduce possible penalties that you could face.

Being proactive about solving your tax problems is essential, as the chief of the IRS criminal investigation division recently told tax professionals at an American Bar Association event that two new IRS enforcement programs are up-and-running.

New IRS Enforcement Programs are Operational

The two new enforcement programs were initially announced in August of 2017, but the IRS criminal investigation division chief indicated in May that the newly created enforcement divisions are now fully operational.

The two new enforcement divisions include the National Coordinated Investigations Unit and the International Tax Enforcement Group. Both groups will be focused on using data analytics, and using physical and manual screening of information, in order to identify patterns and find individuals and organizations that are not in full compliance with U.S. tax laws.

The National Coordinated Investigations Unit will primarily be focused on improperly claimed refunds and on tax return preparers who engage in wrongful behavior. The Unit will be looking for patterns suggesting the same person or group is using unlawful methods to obtain questionable refunds and will be looking for patterns suggesting a tax preparer has knowingly manipulated client returns to reduce taxes owed.

The International Tax Enforcement Group, on the other hand, will instead be focused on facilitating major international tax investigations; on identifying and scrutinizing the use of offshore debt cards; on finding taxpayers who failed to file a Report of Foreign Bank and Financial Account disclosing their foreign accounts; and on the use of cryptocurrency accounts to hide funds.

The International Tax Enforcement Group will be using data analytics to review an extensive amount of data available to the IRS to help spot tax-evaders who use offshore financial accounts to avoid tax liability.

Some of this data will come directly from foreign financial institutions, who are required by international tax treaties to share information with local taxing authorities about accountholders with offshore accounts. Some of the data will come from the Panama Papers, which was a leak of data from a Panama law firm that was instrumental in helping to facilitate offshore tax evasion. Finally, some will come from the Offshore Voluntary Disclosure Program (OVDP), which was a program that encouraged taxpayers to voluntarily report previously undisclosed offshore accounts in exchange for reduced penalties.

Both these new enforcement divisions are expected to help the IRS criminal unit to significantly increase criminal referrals so more people are likely to face consequences for failure to comply with tax rules. If you suspect you could become one of the targets of an IRS investigation, it is important to talk with a Maryland criminal tax lawyer as soon as possible about the options available to you.


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