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Tougher International Tax Enforcement is On the Horizon

Posted in Offshore Account Update on April 30, 2018 | Share

If the IRS has questions about your tax returns or if you are under investigation by the IRS, it's important for you to reach out to a Washington DC tax audit attorney who can help you. 

There are many possible ways that you could come to the attention of the IRS and find yourself facing questions about your compliance with tax laws. However, one of the biggest red flags for the IRS is the possibility that you have undeclared offshore income.

The IRS has been on a multi-year crusade to try to fight tax evasion involving international investments and now the IRS has even created a dedicated new task force solely focused on international tax enforcement.

The IRS is Cracking Down On Offshore Investors

The new task force the IRS created will be staffed by 10 full-time agents whose sole focus is to investigate offshore tax investments and schemes to hide funds in foreign financial institutions.

According to the Wall Street Journal, the agents on the task force will join together with the criminal investigation unit of the IRS to allow for a more strategic approach to investigating tax fraud involving offshore assets. The team of agents will use data from federal tax returns and from reports of suspicious activity provided by financial institutions and the entire team will then pursue the high priority cases that are identified.

The creation of this new task force comes at a time when the criminal division of the IRS has already shifted a lot of its focus to offshore investors. The 2017 annual report of cases completed by the criminal division shows a growing number of completed cases related to offshore investing, with 283 international operations initiated in fiscal year 2017 compared with 221 in 2016 and 186 in 2015. 

The rise in investigations into foreign investing is especially noteworthy because the total number of cases being investigated by the criminal division declined from 3,853 in 2015 down to 3,395 in 2016 and 3,019 in 2017.

The task force will likely have a lot of information to work with in identifying targets to pursue, especially as numerous foreign financial institutions have participated in the Swiss Bank Program in recent years. The Swiss Bank Program allowed foreign banks to avoid criminal prosecution if they entered into agreements to pay a fine and turn over details on accountholders with potentially undeclared offshore funds. The information gleaned from the Swiss Bank program will give the new IRS task force a lot of data to start with that could ultimately lead to focused and effective investigations. 

A spokesperson for the IRS commented that the group would allow the team to be “more strategic,” which has become necessary because of funding limitations. 

Those with funds offshore should be concerned about this new approach and dedicated task force. A Washington DC tax audit attorney like Kevin Thorn can help you if you have offshore funds and are concerned that you might be the target of an IRS investigation or if you are facing any questions from the IRS about your returns. To find out more about what your rights are and how an attorney can help you, give us a call today.


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