Update: FBAR and International Reporting Enforcement
For several years the IRS has made it known that international tax and reporting is a top priority. Additionally, taxpayers and professionals have assumed information gathered under FATCA reporting would be used for enforcement. As we enter 2018, these two thoughts are no longer assumptions and are more evident than ever.
The IRS Criminal Investigation division has announced two major initiatives in this arena. First, a nationally coordinated investigations unit. The group is expected to have higher efficiency due to better organization and structure. Also, the unit will use data analytics to identity areas of concern or noncompliance. This will assist the IRS and Criminal Investigations to deal with limited manpower resources. Along with international enforcement, employment tax and stock fraud will also be key areas of focus.
The other initiative is an international tax enforcement group. This group will also rely on data analytics as well as using subject matter experts. The IRS has a vast array of data that can be utilized from sources such as FATCA. This may be the first direct sign to tax evaders that FATCA is working, and anyone who has not yet gained compliance should seriously consider entering an amnesty program under the OVDP.