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Monthly Archives: January 2020

IRS Criminal Investigation is Hiring More Agents!

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IRS Criminal Investigation expects to hire more agents, pursue more crypto cases

The Internal Revenue Service’s Criminal Investigation division identified $1.8 billion in tax fraud in 2019, with a 91.2 percent conviction rate for all financial crimes, according to the division’s 100th annual report released Thursday, which also highlighted a continued focus on employment tax, cryptocurrency and cybercrime.

This year’s report, which marked the agency's 100th anniversary, continued a general downward trend of investigations and prosecutions for CI over the last few years. In a conference call with reporters, CI chief Don Fort attributed the trend to fewer special agents, as many retire and those who remain in service devote time to inheriting those cases and training new agents. Fort estimated that 130 to 150 agents retire every year, and that the time between onboarding new agents and completion of their first case averages two to three years.

The overall number of CI investigations initiated in 2019 was 2,485, down from 2,886 in 2018 and 3,019 in 2017. Meanwhile, $4.4 billion in proceeds from other (non-tax fraud) financial crimes were identified in 2019, 1,726 warrants were executed, and 1.24 petabytes of digital data were seized.

“We are in a hiring posture now,” Fort explained. “I’m very hopeful we’ve reached the bottom in terms of staffing. We end the year with 2,000 special agents, which puts us at 1970s levels.” Fort expects to onboard more in-depth special agents over the next year. “I’m really excited about that, and hopeful it’s not a one-time event. We have the support for a number of years of robust hiring, to get the numbers back up."

Overall, Fort characterized the past year, his third as chief, as “exciting times” as CI ramps up hiring, continues to take advantage of technology like data analytics, and collaborates with other agencies to combat newer threats related to cryptocurrency and cybercrime.

“We’ve had tremendous cases represented by every field office in every state; a lot of positive momentum there,” Fort said. “As we’ve been challenged in the manpower perspective for the last five to six years, we have used that time wisely. We’ve made investments in cyber, cyber investigations in tax and non-tax, working in data analytics with the Nationally Coordinated Investigations Unit [which became an official CI section this year]. The success we’ve seen there, we’ve invested wisely in the last few years. With the investment in those areas, we’re seeing the fruits of our labor.”

Another area of momentum for CI has been in employment tax enforcement, one of the few areas where the unit saw an upswing in investigations initiated (250), prosecution recommendations (104), informations/indictments (73), those sentenced (50) and the incarceration rate (84 percent), all an increase over 2018.

“In particular, employment tax, we made that a point of emphasis for CI and the IRS as a whole,” Fort said. “The time spent on employment tax has gone up considerably. There is a tremendous amount of noncompliance in that area. It’s a huge part of what funds the federal government. We’ve absolutely made that a point of emphasis. It’s the goal of field officers to work a balanced program area. All noncompliance tax threats in a particular area, as well as money laundering and bank secrecy threats. I can confirm employment tax will continue to be an area of emphasis for us.”

Abusive return preparer program enforcement also experienced some positive shifts in 2019. While the number of investigations in the category were down this year, at 163, the number of prosecution recommendations (203) and sentencings (154) were up slightly over last year, keeping the incarceration rate at a flat 78 percent.

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In terms of collaboration with outside agencies, Fort identified the Joint Chiefs of Global Tax Enforcement, or J5, formed in 2018 among CI and its counterparts in four other countries to battle international tax evasion, as one recent success.

Other examples of interagency successes, though acknowledged by Fort to be more dated, were the shutdowns of darknet markets Silk Road and AlphaBay, in 2013 and 2017, respectively, “a great example of multi-agencies, under the Department of Justice, helping to solve crimes.”

“The most recent success in cryptocurrency was the Welcome to Video case, the child exploitation case,” Fort said, referring to what the DOJ called the “largest dark web child porn marketplace” when it took down the website in October. The use of bitcoin on the site led to CI’s involvement in tracking the cryptocurrency.

Fort anticipates that this kind of collaboration will continue in the years ahead.

“The next wave of crime, in front of our eyes, requires us to employ new ways of investigation in solving these crimes. The crimes are money- and greed-based, conducive to our work in following the money. We all have our own skills and capabilities. We have a lot of initiatives underway to partner with federal agencies and collaborate internationally.”

CI has also been partnering with academia to deepen its expertise in data analytics, working with universities and colleges that are utilizing the technology in innovative ways.

In the next year, Fort expects CI to help take down more dark web marketplaces and create more of a tax focus on cryptocurrency. Fort emphasized that CI currently has many open cases related to cryptocurrency and cybercrime that the agency hopes to make public by the end of this fiscal year.

Have a Criminal IRS Tax Problem? 


  
Contact the Tax Lawyers at 

Marini& Associates, P.A. 
 
 
for a FREE Tax HELP Contact Us at:
www.TaxAid.com or www.OVDPLaw.com orToll Free at 888-8TaxAid (888) 882-9243
 
 
 
 
 
 
 
 
 
 
 

Source:

accountingTODAY

Read more at: Tax Times blog

How Will The IRS Know? – IRS Whistleblower Office Collected More than $616 Million in 2019!

On June 5, 2019, we posted IRS Whistleblower Office Collects Over $1.44 Billion & Paid a Record $312M to Tipsters where we discussed that the Internal Revenue Service’s Whistleblower Program made 217 awards to whistleblowers totaling $312,207,590 and collected $1,441,255,859 in fiscal year 2018, according to a new report. the in its 2019 Annual Report to Congress, the Whistleblower Office reported that it made 181 awards to whistleblowers totaling $120,305,278 (before sequestration), which includes 24 awards under IRC § 7623(b).

Proceeds collected were $616,773,127. Included in the proceeds collected, as a result of § 7623(c), are the non-Title 26 amounts collected for criminal fines, civil forfeitures, and violations of reporting requirements amounting to $110,003,100. Title 26 amounts collected were $506,770,027.

Whistleblower claim numbers assigned in FY 2019 decreased by 7.3 percent from those submitted in FY 2018, and closures increased by 29.8 percent.

The Tax Relief and Health Care Act (TRHCA 2006) added IRC § 7623(b), which enacted significant changes in the Internal Revenue Service (IRS) award program for whistleblowers. TRHCA set a new framework for the consideration of whistleblower submissions and established the Whistleblower Office within the IRS to administer that framework. The TRHCA 2006 requires that the Secretary of the Treasury conduct an annual study and report to Congress on the use of IRC § 7623. The annual study and report to Congress includes any legislative or administrative recommendations for IRC § 7623 and its application. This report discusses the IRS Whistleblower Program activities for FY 2019 in satisfaction of the reporting obligations under the TRHCA 2006.

The Whistleblower Office coordinates with other IRS units, analyzes information submitted, and makes award determinations. If a submission does not meet the criteria for IRC § 7623(b) consideration, the Whistleblower Office may consider it for an award pursuant to its discretionary authority under IRC § 7623(a). A whistleblower must meet several conditions to qualify for the IRC § 7623(b) award program. The information must be:

  • Signed and submitted under penalties of perjury, 
  • Related to an action in which the proceeds in dispute exceed $2,000,000, and 
  • Related to a taxpayer, and for individual taxpayers only, one whose gross income exceeds     $200,000 for at least one of the tax years in question.

If the information meets the above conditions and substantially contributes to an administrative or judicial action that results in the collection of proceeds, the IRS will pay an award of at least 15 percent, but not more than 30 percent, of the proceeds

The award percentage decreases for cases based principally on information disclosed in certain public sources or when the whistleblower planned and initiated the actions that led to the tax law violations. Whistleblowers may appeal the Whistleblower Office’s award determinations under IRC § 7623(b) to the United States Tax Court (Tax Court).

The IRS pays awards from proceeds, and as such, award payments cannot be made until the taxpayer has exhausted all appeal rights and the taxpayer no longer can file a claim for refund or otherwise seek to recover the proceeds from the government. Therefore, the IRS generally cannot make award payments for several years after the whistleblower has filed a claim. 

 

_____________________________
 
Want a Reward of Between 15- 30% of
Underpaid IRS Tax Liabilities for
Blowing the Whistle on a Tax Cheat? 
________________________________________
 
____
 
Contact the Tax Lawyers at
Marini & Associates, P.A.
 
for a FREE Tax Consultation at:
or Toll Free at 888-8TaxAid (888 882-9243).

 

Read more at: Tax Times blog

Union Bancaire Privée, UBP SA Forgot To Report Some US Account Holder?

The DoJ announced that it has signed an addendum to a non-prosecution agreement with Union Bancaire Privée, UBP SA (UBP), a private bank headquartered in Geneva, Switzerland. 

The original non-prosecution agreement was signed on Jan. 6, 2016. At that time, UBP reported that it held and managed 2,919 U.S. Related Accounts, with assets under management of approximately $4.9 billion, and paid a penalty of $187,767,000. 

 
In Reaching This Agreement on January 2, 2020,
UBP Acknowledges It Should Have Disclosed
"Additional U.S.-Related Accounts"
To The Department At The Time Of The Signing
Of The Non-Prosecution Agreement.
 

Pursuant to this revised agreement, UBP will pay an additional sum of $14,000,000 and will provide
supplemental information regarding its U.S.-related account population, which now includes 97 dditional accounts. 


“Foreign banks that participated in the Swiss Bank Program were obligated to identify all accounts in which U.S. taxpayers held an interest, directly or indirectly,” said Richard E. Zuckerman, Principal Deputy Assistant Attorney General for the Tax Division. “Today’s agreement reflects our continued commitment to ensuring that when entities cooperate and make disclosures to the Department, that they do so fully.”

 

 
The Swiss Bank Program provided a path for Swiss banks to resolve potential criminal liabilities in the United States relating to offshore banking services provided to United States taxpayers. Banks eligible to enter the program were required to advise the department that they had reason to believe that they had committed tax-related criminal offenses in connection with undeclared U.S.-related accounts.

As participants in the program, they were required to make a complete disclosure of their cross-border activities, provide detailed information on an account-by-account basis for accounts in which U.S. taxpayers had a direct or indirect interest, cooperate in treaty requests for account information, and provide detailed information about the transfer of funds into and out of U.S.-related accounts, including undeclared accounts.

 
Do You Have Undeclared Foreign Income ?
 
 
Is Your Name Being Handed Over to the IRS?
  
Want to Know if the OVDP Program is Right for You? 
 
Contact the Tax Lawyers at 
Marini & Associates, P.A.   
 
for a FREE Tax Consultation contact us at:
Toll Free at 888-8TaxAid (888) 882-9243
 

 

Read more at: Tax Times blog

151 Offshore Banks & Financial Advisors Are Turning Over Your Names To The IRS – What Are Your Waiting For?

On September 3, 2018 we posted 150 Offshore Banks & Now Financial Advisors Are Turning Over Your Names To The IRS - What Are Your Waiting For? and since then the Government has add Adrian Baron (effective 9/11/2018) to this list bringing the number to 151 Offshore Banks and Foreign Financial Advisors.

The IRS keeps updating its list of foreign banks which are turning over the names of their US Account Holders.  Under the terms of their agreement with the IRS & Treasury, banks are required to:
  • Make a complete disclosure of their cross-border activities;
  • Provide detailed information on an account-by-account basis for accounts in which U.S. taxpayers have a direct or indirect interest;
  • Cooperate in treaty requests for account information;
  • Provide detailed information as to other banks that transferred funds into secret accounts or that accepted funds when secret accounts were closed;
  • Agree to close accounts of account holders who fail to come into compliance with U.S. reporting obligations; and
  • Pay appropriate penalties.

These Banks, Financial Instructions and Foreign Financial Advisors  have made substantial efforts to cooperate with the IRS investigation, including by:

  1. facilitating interviews that their Office with employees, including top level executives;
  2. voluntarily producing documents in response to the Office’s requests;
  3. providing, in response to a treaty request, unredacted client files for the U.S. taxpayer-clients who maintained accounts at their Banks or Financial Instruction; and
  4. committing to assist in responding to a treaty request that is expected to result in the production of un-redacted client files for U.S. taxpayer-clients who maintained accounts at these Banks and Financial Instructions and with these Foreign Financial Advisors. 
This list does not impact the Streamlined programs because you must be non-willful to qualify. All of this is part of the June 2014 improvements to the OVDP, which sparked new interest in cleaning up offshore accounts.
 
  1. With roughly 151 Foreign Banks and Financial Advisors cooperating with the DOJ & IRS and 
  2. FATCA requiring the entire world to report to the IRS
it is INEVITABLE that this increased disclosure, will result in EVERY AMERICAN eventually being discovered. Banks worldwide want to know if there US clients are compliant with the IRS. 

 
As additional banks are added to the list, American taxpayers will continue to be subject to the 50% intentional failure to file penalty, which now applies to all taxpayers with foreign accounts who  make a voluntary disclosure after September 28 2018.
 
Although the 50% penalty is high, willful civil violations can result in tax, penalties and interest totaling 325% of the highest balance in the account for the  most recent six years period. Recent guidance suggests that the IRS could be more lenient in the future, but the IRS’s definition of leniency can still make the OVDP a very good deal that provides certainty.   
 
Do You Have Undeclared Income from one of 
these Offshore Banks or 
Financial Advisors?
 
 
Is Your Name Being Handed Over to the IRS?
  
Want to Know if the OVDP Program is Right for You? 
 
Contact the Tax Lawyers at 
Marini & Associates, P.A.   
 
 
for a FREE Tax Consultation contact us at:
Toll Free at 888-8TaxAid (888) 882-9243

Read more at: Tax Times blog