The Joint Chiefs of Global Tax Enforcement (J5) recently completed a new Challenge event—taking a close look at developing financial technology companies (FINtech) that offer financial services outside mainstream regulatory channels.
Formed in 2018, the J5 is an international group of tax agencies who collaborate to investigate tax crime and prosecute criminal tax matters on a global scale. The JF is composed of experts, agencies, and tax specialists from Great Britain, the Netherlands, Canada, the U.S., and Australia.
The first Challenge undertaken by the group was in 2018. Bringing together data and technology scientists, the group took a focused look at who makes a living off of criminal tax fraud. The second Challenge took place in 2019 and took a deep dive into types of fraud endemic to cryptocurrency.
In March of this year, the Challenge took aim at the ubiquitous domain of FINtech companies. Like so many other collaborative efforts, the meeting took place in a virtual setting spread across sessions to account for international time differences. As a master planning meeting, the Challenge went something like this:
- Legal and regulatory specialists from each of the five member countries discussed compliance options available to each region to investigate FINtech enterprises. These options include legal, criminal, fiscal, and civil measures.
- With a compliance framework, the group put together a list of investigative targets based on intelligence and leads gathered previously.
- By the end of the Challenge, each region identified the specific countries that will be the focus of upcoming investigation.
The Chief of IRS Criminal Investigation (CI) Jim Lee noted, "While a great deal of preparation goes into these events, the Challenges are by no means a rehearsal for us. As evidenced from the last couple of years, these Challenges result in real enforcement actions taken by the J5. They serve as an opportunity to continue to share information and further develop leads, but they also jumpstart investigations. I expect we will see results from this Challenge in the months and years to come."
FINtech is on the cutting edge of financial services that continue to shift from brick-and-mortar banking to cross-border digital financial services that move money with a click. The quicksilver movement of money is a boon to money launderers, fraudsters, and anyone interested in quietly moving money into secrecy jurisdictions offering preferential offshore tax options.
For the J5, the international picture offers resources and data to pursue and protect regional interests. If you happen to find yourself on the wrong end of an IRS criminal tax investigation, speak with a tax attorney with strong experience in criminal tax defense.
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Our legal team at Robert J. Fedor, Esq., LLC provides strategic solutions to complicated tax problems for businesses and individual clints around the world. When you need focused advice or have heard from the IRS—contact us or call 800-579-0997.