AAG Discusses DOJ’s Tax Focus

Offshore Account Update

Posted on December 23, 2015 |

The Internal Revenue Service has the ability to move forward with civil and criminal actions against suspected tax evaders.  The Department of Justice also has a tax division, which works to prosecute individuals and businesses that are in violation of tax law. 

Recently, the Acting Assistant Attorney General (AAG) of the Tax Division of the United States Department of Justice gave a keynote address at a continuing legal education conference held by the American Law Institute. At the keynote address, AAG Caroline Ciraolo outlined some of the Justice Department's priorities.

A New Jersey business tax attorney knows it is essential for individuals and businesses to understand the types of tax law violations that federal authorities will be most aggressive in investigating. If you are concerned because you believe you may be in violation of some of the laws that the DOJ is most focused on enforcing, you need to speak with a business tax attorney to find out if there are options for amnesty programs that can limit penalties and remove the threat of criminal prosecution. 

Call today to speak with an attorney for the information you need about your options when you are concerned about potential civil and criminal penalties for tax law violations.

DOJ's Focus on Foreign Banks and Employment Tax Evasion

Ciraolo indicated the government will continue to be aggressive in fighting to put an end to U.S. citizens hiding money in offshore tax havens.  The Foreign Account Tax Compliance Act (FATCA) requires U.S. citizens to report their offshore accounts, and in countries that have joined in intergovernmental agreements with the U.S., foreign financial institutions are also turning over information to authorities on U.S. accountholders.  The DOJ has been defending FATCA against multiple court challenges in order to ensure U.S. authorities will continue to have the information they need to move forward with tax evasion cases.

The DOJ has been going after foreign financial institutions, with threats of criminal prosecution, in order to get these institutions to enter into settlement agreements and provide details about offshore accountholders.  The Swiss Bank Program also allows banks to come forward and limit penalties by making voluntary disclosures if the institutions helped facilitate tax evasion. 

Ciraolo warned that the government is well beyond Switzerland in its investigation of offshore tax havens, with investigations in Belize, Panama, the British Virgin Islands, and Liechtenstein, among other places. Enforcement will continue even when the Swiss Bank Program ends.

Offshore accounts are not the only focus for the DOJ either.  Ciraolo has announced a new push to stop employment tax evasion, with the DOJ teaming up with the IRS.  An update has been made to the criminal tax manual related to 26 U.S.C. Section 702, which establishes the criminal consequences of a willful failure to withhold and pay taxes.  More training is also being provided to special agents, DOJ lawyers, fraud technical advisors, and IRS revenue officers on the issue of employment tax evasion.

Offshore accountholders need to be concerned about continuing efforts to stop tax evasion using foreign accounts, while businesses must focus on the threat they face under aggressive enforcement of employment tax rules. Kevin Thorn, a business tax attorney in New Jersey, should be consulted for help if you are concerned your organization could be accused of violating the rules.


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