From the Tax Law Offices of David W. Klasing -IRS Criminal Investigations Chief Warns Taxpayers Ahead of Filing Season: "There is Nowhere to Hide"

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Tax Law Offices of David W. Klasing, PC

Feb 19, 2020, 06:00 ET

IRVINE, Calif., Feb. 19, 2020 /PRNewswire/ -- Don Fort, who has overseen several aggressive tax enforcement initiatives since his appointment as chief of the IRS Criminal Investigation division in 2017, has a strong message for those taxpayers: if you have engaged in tax fraud, "there is nowhere to hide" from IRS-CI. This is not an empty threat, with IRS-CI achieving a conviction rate of over 91% in 2019.

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"They took their money offshore and hid around the world," said Fort, "but we found them. They went on the dark web thinking that their actions were anonymous, but they weren't, and we again found them.

"They now deal in cryptocurrency," he continued, "again thinking this will make them anonymous, but our agents have once again proved that there is nowhere to hide. We will not stop in our pursuit [of tax offenders]."

In particular, the division has announced that it plans to focus on taxpayers who hold or have engaged in:

Unreported cryptocurrency transactions. The IRS argues that virtual currency is frequently used to facilitate tax evasion, money laundering, and organized crime, leading to the creation of an international task force dedicated to combating "the growing threat to tax administrations posed by cryptocurrencies and cybercrime."
Abusive micro-captive transactions. The IRS has recently stepped up its enforcement efforts around abusive micro-captives, which repeatedly earn a spot on the IRS' annual "Dirty Dozen" list.
Offshore financial accounts. As longtime readers will recognize, foreign bank accounts have been an IRS enforcement priority for years, spurred partly by the creation of the Foreign Account Tax Compliance Act (FATCA) in 2010. In 2019, the IRS hinted at expanding its presence in tax havens like Singapore, Dubai, and the Netherlands.

With 12 new audit-focused groups of agents now forming, the peril for taxpayers is only increasing. The danger is especially great for offshore account holders, cryptocurrency users, and small business owners, all of whom are likely candidates for an IRS tax audit. See a criminal tax defense attorney if you have exposure.

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Contact: Dave Klasing, [email protected]

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