IRS:CI has a unit that responds to specialized areas of tax crime. The International Tax and Financial Crime (ITFC) group focuses on fraudulent activity involving offshore tax holdings, financial institutions, and foreign bank accounts.
The IRS formed the ITFC in 2017. As part of the field office in Washington, DC, the unit is composed of special agents from across the country with expertise in international tax intrigue and tax evasion. Among others, types of projects in which these agents engage include:
- Reducing tax evasion through pursuit of foreign financial institutions (FFIs): In 2010, Congress enacted the Foreign Account Tax Compliance Act (FATCA), a measure that requires foreign financial institutions to report holdings of U.S. taxpayers to the IRS. The Swiss Bank Program was initiated in 2013 through the work of the IRS and the Department of Justice (DOJ). At the time, and still today, Swiss banking interests sometimes offer services to U.S. taxpayers that help them to avoid their tax liability. Typically, the IRS enters into non-prosecution agreements in exchange for compliance with U.S. regulations. The agreement requires each institution to completely disclose cross-border transactions and provide detailed information on accounts owned by, or associated with, U.S. taxpayers. The strident efforts of the IRS in this regard have tightened services provided abroad to U.S. taxpayers, due to the heightened requirements on bank to ensure all information is disclosed to the U.S. Treasury.
- Offshore tax investigations: According to the IRS, the ITFC also “works to identify and investigate enablers, financial institutions, third-party asset managers, promotors, referral agents, and expatriated U.S. citizens, who utilized international jurisdictions to effect tax fraud.” The ITFC engages in partnerships with the Department of Justice and the United States Attorney’s offices to investigate offshore tax fraud, tax evasion, and money laundering.
The ITFC also works with the Joint Chiefs of Global Tax Enforcement (G5), a joint effort between the U.S., Australia, the U.K., and the Netherlands. The group was formed to create a larger information and enforcement network to battle money laundering. Following a series of document leaks several years ago that revealed the real scope of illicit money being funneled around the world, the G5, along with the ITFC and other partnering agencies, agreed to collaborate to battle global tax crime.
ITFC is an integral part of the enforcement effort of the IRS to respond to international tax crime in its varying forms and guises. If you have knowledge of discrepancies in your reporting of offshore assets, talk to an experienced tax attorney for guidance before you hear from the IRS.
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The tax attorneys at Robert J. Fedor, Esq., LLC help clients and companies locally and abroad respond to compliance challenges, allegations of tax crime, or other tax concerns. When you need responsive, legal advice, contact us or call 800-579-0997. We have offices in Cleveland and Chicago for your convenience.