IRS and Joint Chiefs of Global Tax Enforcement Targeting Offshore Tax Evasion in 2020

Hot Topics, Offshore Account Update

Posted on January 28, 2020 |

In 2018, the Internal Revenue Service (IRS) joined forces with tax authorities in four other countries to form the Joint Chiefs of Global Tax Enforcement, known as the J5. In 2020, the J5 announced its first multinational tax evasion investigation, and it warned that banks and taxpayers should expect more similar efforts going forward.

IRS and J5 Will Target U.S. and International Taxpayers in 2020

The J5 was established, “to combat[] transnational tax crime through increased enforcement collaboration,” on an international scale. It is comprised of senior agents and officials from IRS Criminal Investigations (IRS-CI) and the national tax authorities of Australia, Canada, the Netherlands, and the United Kingdom. Through its investigative and law enforcement efforts, the J5 supports the civil and criminal prosecution of banks and taxpayers in its member countries and abroad. Our New Jersey criminal tax lawyers are monitoring the J5’s efforts closely on behalf of our clients.

In its first coordinated effort, the J5 targeted a Central American bank that it linked to money laundering and tax evasion schemes perpetrated by U.S. taxpayers and others around the globe. As the IRS stated in a recent News Release:

“It is believed that through this institution a number of clients may be using a sophisticated system to conceal and transfer wealth anonymously to evade their tax obligations and launder the proceeds of crime. . . . [I]nvestigations are ongoing. It is expected that further criminal, civil and regulatory action will arise from these actions in each country.”

Offshore Accounts, U.S. Tax Law Compliance and IRS Voluntary Disclosure

For U.S. taxpayers who have money stored in offshore accounts, federal tax law compliance needs to be a top priority. Among other things, this means complying with the IRS’s voluntary disclosure requirements. For those that fail to comply, even unknowingly, the IRS’s and J5’s enhanced law enforcement efforts could pose a significant risk for fines, interest and other penalties.

Under federal law, U.S. taxpayers have an obligation to report their offshore holdings to the IRS. Failure to submit the requisite annual reports can create exposure to civil and criminal penalties. While most audits and investigations targeting offshore disclosure violations are civil in nature, when a coordinated, multi-national law enforcement effort leads to a large-scale takedown, those involved are significantly more likely to be at risk for criminal prosecution.

As a result, U.S. taxpayers that hold offshore accounts – particularly in countries that have been labeled as tax havens – must ensure that they are up-to-date on their voluntary disclosures. Those that have failed to disclose their offshore accounts (and that may be at risk for prosecution for tax evasion or other tax crimes) may need to take additional measures to protect themselves as well. Contact us to discuss your situation with a New Jersey criminal tax lawyer in confidence.

Request an Appointment at Thorn Law Group

For more information about IRS voluntary disclosure and the legal risks involved in holding assets offshore as a U.S. taxpayer, contact Thorn Law Group for a confidential consultation. To request an appointment with New Jersey criminal tax lawyer Kevin E. Thorn, Managing Partner, Thorn Law Group, call 201-355-8202 or send us your information online now.

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