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Mark Matthews and Zhanna Ziering Discuss Rise in U.S. International Tax Prosecutions with Daily Tax Report

December 28, 2017, Daily Tax Report

IRS Criminal Investigation division indictments have been steadily decreasing over the past five years, but international indictments have continued to rise.

. . .

Raising a Red Flag

Mark E. Matthews, a former IRS chief of Criminal Investigation and now a member at Caplin & Drysdale, Chartered, said FBAR cases raise a red flag.

“The government's practice in criminal offshore cases of combining a 50 percent FBAR penalty with tax loss figures and fraud penalties going back as many as 10 or more years is creating financial penalties for tax cases many multiples higher than in previous decades of tax enforcement,” he said.

The resulting penalties can be more than 10 times the tax loss in these cases, in addition to possible incarceration, Matthews said. The international efforts are continuing “despite continuing and significant staffing cuts, which are regrettable,” he said.

. . .

Zhanna A. Ziering, also a member at Caplin & Drysdale, said taxpayers should be aware that the government has more information than ever before.

She said she expects the proliferation of data, received either through treaty requests or mined from the Panama and Paradise papers, to bring “a steady increase in offshore criminal enforcement and a significant increase in offshore civil enforcement.”

With the dedicated international group at the IRS and the agency's shift from identity theft cases, “we expect to see a substantial increase in all criminal tax issues, including those involving international issues,” Ziering said.

For the full article, please visit Bloomberg Law’s website (subscription required).

Excerpt taken from the article “Watching the World: U.S. International Tax Prosecutions Rise” by Matthew Beddingfield and Alison Bennett for Bloomberg Law’s Daily Tax Report®.


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