Monday, February 16, 2015

Article on Offshore Account Developments (2/16/15)

Readers might be interested in a recent article -- Justin Thornton and Jay Nanavati, DOJ and IRS Use “Carrot ‘n Stick” to Enforce Global Tax Laws, 29 Criminal Justice 4 (2014), here.  The authors are excellent lawyers and major players in in the offshore bank practice and provide a very good summary of developments up to the date of  publication.

Topics covered are:
  • Offshore Voluntary Disclosure Program
  • John Doe Summonses
  • Criminal Prosecution of Banks and Bankers
  • DOJ Program for Swiss Banks
  • Prosecutions of US Taxpayers
  • FATCA Developments


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  2. GAO reports (yet again) that the IRS is still giving away money to fraudsters and enabling identity theft .

    This is of course while the IRS/US Treasury continues to demand money from those living OUTSIDE the US and receiving NO BENEFIT. This is while the US persists with FATCA extortion of the rest of the world, and in threatening and persecuting those living outside the US and ALREADY paying taxes in full to the non-US tax authorities where they actually live and receive benefit.

    I love this phrase from the latest GAO report regarding IRS assumptions and their lack of any documentation for their rationale;

    “…While IRS’s fraud estimates note the relevant cost assumptions used to develop estimates, they do not provide the rationale or analysis to support them. Officials stated they did not document the rationale because of the time and resources required. Best practices suggest that agencies should document assumptions…”.. from

    ‘Identity and Tax Fraud:

    Enhanced Authentication Could Combat Refund Fraud, but IRS Lacks an Estimate of Costs, Benefits and Risks’

    GAO-15-119: Published: Jan 20, 2015. Publicly Released: Feb 19, 2015.

    Sounds so very familiar – just like the entirely non-existent documentation / back of a cocktail napkin figures that the IRS/US Treasury uses for its estimates of the tax gap it attributes to those abroad – who are living and already paying taxes in full to the tax authority of the countries where they actually live – outside the US.

    The IRS cannot ensure the security of the information it already collects from US homelander taxpayers. It wastes significant resources paying out to fraudsters who have stolen US taxpayer identities (the GAO report says; “..IRS estimated it prevented $24.2 billion in fraudulent identity
    theft (IDT) refunds in 2013, but paid $5.8 billion later determined to be fraud. Because of the difficulties in knowing the amount of undetected fraud, the actual amount could differ from these point estimates. IDT refund fraud occurs when an identity thief uses a legitimate taxpayer’s identifying information to file a fraudulent tax return and claims a refund…”).

    So, when FATCA data starts pouring in under the IGAs, why would anyone think it would be secure?


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