Tax News: IRS Having Issues With International Tax Enforcement
Despite claims that it was stepping up international tax enforcement, based on a recent report from the Treasury Inspector General for Tax Administration (TIGTA) the IRS is falling short on international tax compliance. TIGTA’s report found that ineffective management oversight, control weaknesses, and unreliable statistics have hampered the efforts to crack down on taxpayers who are not compliant with international tax reporting. Furthermore, despite having tools such as the customs hold, there is not clear information showing how effective or utilized these tools are in enforcement. Even as TIGTA was making its recommendations for action, the IRS was at work to try to improve the processes and procedures. The biggest aid to the IRS has been the Offshore Voluntary Disclosure Program (OVDP) and FATCA. Through the OVDP program many taxpayers have engaged in self-enforcement in order to avoid criminal prosecution and severe penalties. Nevertheless, TIGTA feels the IRS needs to take further action to make sure overall enforcement is bolstered.
Taxpayers should not take any comfort in these weaknesses when it comes to international compliance enforcement. The IRS has made it very clear that this is a priority, and through FATCA, they are slowly gaining the support of the rest of the world. It is only a matter of time before the IRS is functioning at a very high level with international tax enforcement. At that time, it is likely that many amnesty programs such as the OVDP will no longer be available, and it can be assumed the IRS would not be sympathetic to the people who didn’t come forward when they had the chance. If you have international tax questions or issues, time is of the essence to come forward now and take advantage of the options the IRS has given to become compliant. Contact us at Hone Maxwell LLP today to discuss your options for compliance or how to make sure you are meeting your obligations on an on-going basis.