1. Trust Fund Tax Cases. IRS CI representative emphasized the continuing emphasis on failure to pay over withheld employee tax. For those with subscriptions to Tax Notes Today, the following article has some detail: Andrew Velarde, ABA Meeting: Employment Taxes Will Be Focus in Criminal Investigations, 2015 TNT 91-6 (5/12/15). The representative did say that generally only the egregious cases involving lavish spending by the persons failing to pay over the withheld taxes, but that the public needs to know that even failing to pay over in order to keep the business afloat and employees paid is still a crime. One practitioner referred to a general understanding among practitioners that, if the withheld tax is used for personal expenditures, that is a criminal problem, but, if used to keep the business going, that was not a criminal problem. But, the IRS representative said that practitioners perhaps should be cautious about continuing to rely upon the supposed rule because the public and practitioners should not think they have a criminal prosecution pass just because they were trying to keep the business afloat.
2. Virtual Currency. The IRS said that it is ramping up its enforcement for virtual currency. The IRS reported in the 2014 CI Annual Business Report, here:
Virtual Currency: During Fiscal Year 2013, Criminal Investigation began pursuing investigations in the new program area of virtual currency. Virtual currency is considered any medium of exchange that operates like a fiat currency but does not have legal tender status in any jurisdiction. As with any money, virtual currency can be used in a wide variety of crimes involving tax fraud, money laundering, and other financial crimes. During Fiscal Year 2014, IRS-CI had a substantial role in the investigation that led to a criminal complaint and shut down of the Silk Road. IRS-CI also played a substantial role in a spinoff investigation related to the Silk Road that led to the criminal complaint and guilty plea of Charlie Shrem. Both of these investigations involved a significant component of virtual currency.
In Fiscal Year 2015, IRS-CI will continue to focus on financial crimes that involve virtual currency by collaborating with FinCEN and other federal law enforcement agencies to identify the movement of illegal monies utilizing virtual currency. In addition, IRS-CI will continue its collaboration efforts with other Business Operating Divisions (BOD) within IRS to include SB/SE and LBI. IRS-CI will work with the BODs to evaluate the effect of the virtual currency guidance issued by IRS in March 2014 and to investigate those individuals who use virtual currency as a tool to evade taxes.3. Suspicious Activity Reports. Ever wonder what happens with all those suspicious activity reports filed by banks and others? There is a Suspicious Activity Report Task Force in each judicial district lead by an AUSA and with IRS CI agents assisting the analysis of the reports.
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ReplyDeleteA penalty of $4.25 m on $76 m is around 5%-6%, far less than other banks have paid.
ReplyDeleteAlso, $76 m total for 70 accounts works out to just over $1m account size, which is the typical minimum for private banking. Accounts that size do risk being subject to treaty request. However, any smaller accounts existing prior to the bank's foray into private banking, and far below $1m may not meet the threshhold for the treaty request.
Of course there is the big question as to a treaty request based on info provided by the bank would be legal or break Swiss law, and that question does not seem to have been answered to my satisfaction.
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