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News and Events

New Criminal Tax Enforcement Groups Offer Help to the IRS

Hot Topics, News

Posted in on May 31, 2018

The chief of the IRS Criminal Investigation Division (IRS-CI) spoke recently to a group of tax professionals at an event hosted by the American Bar Association.  Chief Don Fort told the tax attorneys who he was speaking to that the IRS now has two new enforcement units that are operational and that are working behind the scenes to analyze data to identify patterns and find taxpayers who are evading their U.S. tax obligations.

The announcement is a harbinger of things to come, as there are likely to be many more people prosecuted for tax offenses now that two IRS investigation units are using computer analytics to spot wrongful behavior and obtain evidence of it.

If you aren't in full compliance with all of your tax obligations, particularly obligations related to foreign financial accounts, it is important that you reach out to a Virginia criminal tax lawyer as soon as possible to find out what these new IRS investigation tactics could mean for you and what options you have to proactively try to reduce any penalties you might face in the future.

IRS Enforcement Divisions Focus on Offshore Accounts

The two new enforcement units that are now working with the IRS Criminal Investigation Unit include the National Coordinated Investigations Unit and the International Tax Enforcement Group (ITEG).

The purpose of these enforcement units is to effectively use computer analytics to better analyze and act upon data. For example, the ITEG will be using computer algorithms and manual screening to comb through information provided to the U.S. by foreign financial institutions under tax treaty information exchanges.

It will also be making use of information from the Panama Papers, which was a leak of information from a law firm in Panama that helped investors to establish offshore accounts. Finally, information from the Offshore Voluntary Disclosure Program (OVDP) will also be used. This program encouraged taxpayers to voluntarily disclose offshore accounts they had previously been required to disclose but had not yet reported to the IRS.

The ITEG will aim to identify taxpayers who haven't filed an Report of Foreign Bank and Financial Account, will scrutinize the use of foreign debit cards, and will otherwise aim to find taxpayers with undeclared offshore accounts.

The National Coordinated Investigations Unit, on the other hand, will be launching two programs: the Questionable Refund Program and the Return Preparer Program. These are aimed at identifying returns that were prepared by the same person or using the same characteristics or methods to improperly obtain refunds and are aimed at identifying tax preparers who use questionable methods to manipulate client returns in order to reduce tax liability or improperly obtain refunds. 

These two enforcement units are expected to significantly increase the ability of the IRS to initiate criminal cases. For those who could potentially face an IRS investigation, it is important to get help from a Virginia criminal tax lawyer who can provide assistance in reducing the likelihood of prosecution or limiting the penalties that could be faced. Speak with attorney Kevin Thorn today.


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