Saturday, November 8, 2014

DOJ Tax Representative Touts Government Successes (11/8/14)

Tax Notes Today has an article reporting on a presentation by Gil Rothenberg, Chief of DOJ Tax Appellate Section noting the recent success of DOJ Tax.  Margaret Burow, Appellate Chief Points to DOJ's Recent Tax Prosecution Successes, 2014 TNT 217-8 (11/10/14) [no link available].   The presentation was at the November 6 at the American Bar Association Section of Taxation conference in Philadelphia..  I offer here certain items from the article on statistics.

As a predicate on statistics, I offer the following from my current working version for the next edition of my Federal Tax Crimes book:
Per the Wikipedia entry on “Lies, damned lies and statistics,” here Mark Twain popularized the saying which he attributed it to Benjamin Disreali, 19th Century British Prime Minster, but there is no evidence that Disreali actually said it.  There is, as usual, a more nuanced aphorism: “It is easy to lie with statistics, but easier to lie without them,” attributed to Fred Mosteller, one of the most eminent statisticians of the 20th Century. 
I doubt that the statistics presented by Mr. Rothenberg lie in any material way either in the data, the data set, and the implications desired from the presentation of the statistics.  But, that may not always be the case with statistics from DOJ Tax.  (For example, I have questioned some of the criminal statistics and, upon inquiry to DOJ Tax to explain them, received no response; that's another story, however.)

First, Rothenberg starts with statistics of offshore bank initiative:
Since reaching an agreement with Swiss bank UBS in 2009, the Tax Division has charged 78 account holders and 39 banks and advisers in connection with the use of foreign financial accounts to evade U.S. taxes and reporting requirements, Rothenberg said. Sixty-three account holders have pleaded guilty to tax evasion, seven have been convicted, and some remain fugitives, he said. While enforcement efforts were initially focused on wrongdoing in Switzerland, there are disclosure initiatives involving banking activities in other countries, such as India, Israel, Liechtenstein, Luxembourg, and some Caribbean countries, he said.
My statistics have slightly different numbers but not enough to be material.  See the most recent statistics on the page titled Offshore Charges / Convictions Spreadsheet (11/7/14), here.

Second, Rothenberg presented DOJ Tax's win rates:
Rothenberg discussed the division's 95 percent litigation and 96 percent appeals win rate, which included a 63 percent success rate in appeals brought by the government. He added that if the government decides to appeal a taxpayer victory, practitioners should advise their clients of the odds of success. 

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