The IRS has announced two new and highly sophisticated approaches to criminal tax enforcement. The first, called the “data initiative”, sounds similar to the data analysis first used by FinCen to uncover money laundering operations. It will consist of data analysis from information provided by field offices throughout the country. This will allow the IRS to identify areas of non-compliance that have nationwide impact and use its resources to coordinate investigations and provide greater support to the field agents. It will also help to deal with decreasing personnel and resources due to budget constraints. The initial projects will focus on international tax enforcement, employment tax and SEC microcap fraud. It is also expected to identify new areas of non-compliance and start investigations in these new areas.
The second “new” program will be a specialized group of agents already experienced in international tax enforcement. Their expertise will provide specialized skills and knowledge in this area of enforcement. Their efforts, along with the Department of Justice, international tax partners and information gathered from the Bank Secrecy Act, FATCA, whistleblowers, the Offshore Voluntary Disclosure Programs, the Panama Papers, etc., will allow them to identify, through data analysis, new or continuing non-compliance in the international area. Initially, the group will consist of 10 to 12 special agents working out of the Washington D.C. field office. Others will be located at “strategic” locations around the country.
These new programs should give further incentive to those who have yet to avail themselves of the Offshore Voluntary Disclosure programs to give further serious consideration to doing so. Time continues to run out for those continuing to believe they will not be discovered.