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IRS: International Authorities are “Closing the Net” on Global Tax Evasion

Posted in Offshore Account Update on February 28, 2020 | Share

In January, we discussed the IRS’s announcement of the first major crackdown executed by the Joint Chiefs of Global Tax Enforcement (J5), a collaborative international law enforcement effort focused on combating the illegal use of offshore banks and shelter schemes for tax evasion. In February, the IRS released an update on the J5’s enforcement efforts in a News Release captioned, “J5 tax chiefs closing the net on global tax evasion.”

As the IRS’s News Release makes clear, combatting cross-border tax evasion continues to be a top priority among all of the J5 countries (the United States, the United Kingdom, Australia, Canada, and the Netherlands). For U.S. taxpayers with offshore accounts, this means that compliance needs to be a priority, and taxpayers who have questions about international tax compliance should consult with a Washington D.C. offshore account attorney promptly.

The J5 is Enhancing Its Enforcement Efforts Following Its Successful “Day of Action” in January

In the wake of its “day of action” in January that targeted a single international bank in Central America, the IRS reports that the J5 will be enhancing its enforcement efforts throughout the year. According to the IRS, “The [J5] has shared expertise to identify the most common and impactful mechanisms, enablers and structures that are being exploited to commit transnational tax crime and will be focusing on those criminals who present the greatest threat to the J5 countries in 2020.”

Critically, while the J5 may be focusing its efforts on international banks and other “enablers,” the IRS and the tax authorities in its other member countries have made clear that they also intend to fully prosecute individual and corporate taxpayers who utilize these institutions to perpetrate tax evasion and other tax crimes.

What Does All of This Mean for U.S. Taxpayers?

As a U.S. resident, a U.S. citizen living abroad, or the owner of a business that owes reporting and payment obligations to the IRS, what do the J5’s enforcement efforts mean for you? In short, they mean that you need to be absolutely certain that your offshore accounts and international tax planning strategies do not raise any “red flags” for possible criminal activity. From the country(ies) in which you own offshore accounts to the sufficiency of your Foreign Account Tax Compliance Act (FATCA) compliance efforts, there are various factors that the IRS will consider in deciding whether to initiate an audit or launch a criminal tax investigation.

As the J5 continues to find success targeting international banks, the risks for individual and corporate taxpayers will continue to increase as well. If you have any concerns, we encourage you to contact us promptly for a confidential consultation.

Speak with Washington D.C. Offshore Account Attorney Kevin E. Thorn

Are you concerned that you or your company could be at risk as the result of the J5’s crackdown on international tax fraud? If so, we encourage you to get in touch. To request an appointment with Kevin E. Thorn, Managing Partner, Thorn Law Group, call 202-349-4033 or contact us confidentially now


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