Saturday, December 8, 2012

DOJ Tax and IRS Entreaties to Join OVDP 2012 (12/8/12)

I posted an earlier blog on a report from the American Bar Association Section of Taxation's annual National Institute on Criminal Tax Fraud in Las Vegas.  See IRS and Practitioners Comment on Streamlined OVDI Procedure (12/7/12), here, reporting on Shamik Trivedi, IRS Urges Low Risk Account Holders to Apply Under Streamlined Procedures, 2012 TNT 236-3 (12/7/12).

Some other key points from the article are:

1. Per Kathryn Keneally, AAG TAX, DOJ Tax and IRS priority is to identify those who moved money "from one investigated bank  to another, especially to those banks that may not have any U.S. operations;" their time is running out.  I think this is a bit too cryptic.  There's some detail behind it that I could speculate.  My speculations are often wrong, so I refrain and spare the reader.

2.  Per IRS Deputy Chief Counsel, the IRS is getting information from "lots of whistleblowers," treaty requests and data mining of information received from other taxpayers in the offshore voluntary disclosure programs.

These are in effect pleas / warnings to taxpayers to turn themselves in by joining OVDP 2012.  I suspect that the truth is that, if a significant number of taxpayers do not turn themselves in, the IRS will have limited ability to discover, investigate and prosecute criminally or civilly all of that dataset.  DOJ Tax and the  IRS are trying to convince taxpayers that the form of audit lottery they play going far now will have worse odds than it had previously.  Perhaps everyone involved will not suffer the consequences, but many will and, among the many that will, could be you.  And the consequences could be far worse than if you come clean now and get right for the past and going forward.


  1. Does the IRS realize that there are millions of US citizens living abroad and tens of millions of immigrants with legitimate (non-tax) reasons for having foreign accounts and that therefore 33,000 disclosures are a drop in the bucket?

    Do they not also realize that someone whose foreign funds originated abroad (work, sale of house, inheritance) and who is or was a foreign resident or citizen can very easily hide those funds so that the IRS will never find them? (I will not spell out how, but it's pretty simple and obvious.) So why are they treating me and others who voluntarily revealed accounts they would have never found out about, in an honest effort to correct honest mistakes, like they treat willful evaders? They are simply motivating those who made mistakes to become willful.


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