The IRS appears intent on the continued crackdown of U.S. persons who have failed to properly report their full worldwide income and foreign financial assets to the U.S. government.
Consolidation of Elite Specialists in Foreign Asset and Income Reporting
On August 2, the IRS Criminal Investigation (IRS-CI) Chief Don Fort announced that the IRS-CI is putting together a new international tax enforcement group, which is expected to be fully operational by October 1.
The group will consist of elite special agents who will investigate and pursue international tax cases. According to Fort, “What we are essentially doing is consolidating some of our foremost experts in these international tax cases who are really the nationwide experts in this field and putting them under the umbrella of one focused operational group.”
The group will be based out of a Washington, DC, field office, and it will target taxpayers who have not fully reported their worldwide income and foreign financial assets.
Advanced Use of Data Analytics To Identify Noncompliant Taxpayers
Not only will the new group bring together national experts for the first time, but it will also have additional new tools at its disposal.
One of the new tools is a nationally coordinated investigation unit that will have a heavy data analytics component. Fort said, “This particular unit is going to report directly to our frontline executives here in Washington D.C. The goal of the unit is to really use all of the data that we have available to us to help identify and develop areas of noncompliance.”
In recent years, the IRS has compiled a wealth of data from Foreign Bank Account Reports (FBARs) and from amnesty programs, including the Offshore Voluntary Disclosure Program (OVDP). Furthermore, foreign financial institutions have started to send the IRS data as required under the Foreign Account Tax Compliance Act (FATCA), and this data sharing is only expected to increase.
With the formation of the new IRS-CI enforcement group and investigation unit, the IRS is adding another weapon to its arsenal of detecting noncompliance.
