Skip to Main Content
 

Mark Matthews Comments on International Tax and Financial Regulatory Agenda

January 6, 2015, Worldwide Tax Daily

During The Society of Trust and Estate Practitioners' (STEP) first global congress, Caplin & Drysdale's Mark E. Matthews commented on international data collection and how the IRS will use that data. For the complete article, please visit Worldwide Tax Daily's website (subscription required).

Excerpt taken from the article "STEP Forum Focuses on International Tax and Financial Regulatory Agenda"  by Bruce Zagaris for Worldwide Tax Daily .

International Data Collection

Mark Matthews of Caplin & Drysdale in Washington said that IRS resources are widely misaligned. The average small business is reporting only 5[2] percent of its income. The level of noncompliance by applicants for the offshore voluntary compliance programs is much lower than that by small business. The IRS is down 13,000 enforcement people just as it has been allocated the responsibility of enforcing the Affordable Care Act. The ability of the IRS to accept and use data is challenging in the short term. It receives data from multiple sources: the Schedule B on the 1040, FBARs, 8938 reports, the offshore voluntary disclosure program, and FATCA. Information through the latter will go into automatic underreporting data. Some taxpayers will receive letters from the IRS. Some taxpayers will receive audits, and others will encounter criminal enforcement.

...

Government Use of Data

Matthews said that the IRS is obtaining information from multiple data and will use it civilly and criminally. The IRS is especially interested in penalties and has created a generation of agents focused primarily on generating penalties. When the data lead to criminal investigations, taxpayers should be worried. The Swiss leaver lists, a requirement of the U.S. DOJ voluntary disclosure program for Swiss banks, help. Neither the number of prosecutions nor the average amount of the bank accounts in criminal prosecutions has been high. Two-thirds of persons convicted have received sentences of probation. The DOJ track record shows poor case selection. In November Raoul Weil, former head of private wealth, UBS, was acquitted after a three-week trial. The IRS has said that there will be another John Doe summons proceeding in a country other than Switzerland. There is likely to be much more data collection in the future.

________________________________________________

About Caplin & Drysdale
Having celebrated our 50th Anniversary in 2014, Caplin & Drysdale continues to be a leading provider of tax, tax controversy, and litigation legal services to corporations, individuals, and nonprofits throughout the United States and around the world. We are also privileged to serve as legal advisors to accounting firms, financial institutions, law firms, and other professional services organizations.

The firm's reputation over the years has earned us the trust and respect of clients, industry peers, and government agencies. Moreover, clients rely on our broad knowledge of the law and our keen insights into their business concerns and personal interests. Our lawyers' strong tactical and problem-solving skills - combined with substantial experience handling a variety of complex, high stakes, matters in a boutique environment - make us one the nation's most distinctive law firms.

With offices in New York City and Washington, D.C., Caplin & Drysdale's core practice areas include:

-Bankruptcy
-Business, Investment & Transactional Tax
-Complex Litigation
-Corporate Law
-Employee Benefits
-Exempt Organizations
-International Tax
-Political Law
-Private Client
-Tax Controversies
-Tax Litigation
-White Collar Defense

For more information, please visit us at www.caplindrysdale.com.

Washington, DC Office:
One Thomas Circle, NW
Suite 1100
Washington, DC 20005
202.862.5000
        New York, NY Office:
600 Lexington Avenue
21st Floor 
New York, NY 10022
212.379.6000

___________________________

Disclaimer
This communication does not provide legal advice, nor does it create an attorney-client relationship with you or any other reader. If you require legal guidance in any specific situation, you should engage a qualified lawyer for that purpose. Prior results do not guarantee a similar outcome.

Attorney Advertising
It is possible that under the laws, rules, or regulations of certain jurisdictions, this may be construed as an advertisement or solicitation.

© 2017 Caplin & Drysdale, Chartered
All Rights Reserved.