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DOJ Confirms Action To Continue Against US Tax Evasion

by Mike Godfrey,, Washington

02 February 2016

Following the completion of its Swiss Bank Program, the Acting Assistant Attorney General, Caroline Ciraolo, has confirmed that the US Department of Justice (DoJ) will continue its other actions against offshore tax evasion.

During remarks on January 29 to the American Bar Association's Tax Section Midyear Meeting in Los Angeles, Ciraolo noted that the Swiss Bank Program, for Swiss banks that were not already being investigated, closed on January 27 with a total of 80 financial institutions having signed non-prosecution agreements and more than USD1.36bn in penalties having been imposed.

In accordance with the terms of the Program, banks also mitigated their penalties by encouraging US accountholders to come into compliance with their US tax and disclosure obligations. "The Program has driven thousands of taxpayers into the Internal Revenue Service (IRS) voluntary disclosure programs," Ciraolo said.

"In October 2015, the IRS reported more than 54,000 voluntary offshore disclosures and the collection of more than USD8bn in taxes, penalties, and interest," she added. "These figures have substantially increased since the Program was announced in August 2013, due in part to the pressure applied by the Swiss banks on their accountholders to come into compliance."

She confirmed DOJ Tax Division attorneys and IRS personnel are now reviewing the information received from other Swiss banks that maintain that they did not commit any violations of US law, but seek a non-target letter after providing information required by the Program.

Ciraolo disclosed that additional action can be expected from the DOJ in 2016. She said the DOJ is "working closely with the IRS in its efforts to obtain foreign account records. … At this point, the message is clear: taxpayers are required to maintain foreign records and produce them upon request."

In addition, "where the IRS is aware of possible violations of the internal revenue laws by individuals whose identities are unknown," she said, "the Department has sought and will continue to seek orders authorizing the issuance of 'John Doe' summonses."

She concluded that "financial institutions and individuals who have facilitated the concealment of offshore accounts and the evasion of US tax obligations would be well advised to anticipate an investigation, and consider voluntarily disclosing any criminal activity to the Department, before they become the subject of an investigation."

TAGS: individuals | compliance | tax | tax compliance | law | banking | Internal Revenue Service (IRS) | tax authority | offshore | agreements | United States | penalties | Tax

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