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Jesse Eisinger just did a piece today in the New York Times about how we might soon be seeing an increase in the enforcement of our tax laws after an eight year decline in audit and prosecution of tax cases by the IRS.  To recap: Congress has been cutting the IRS’s budget for almost a decade straight now, and without a sufficient budget you don’t have people at the IRS to enforce our country’s tax…
The IRS Whistleblower Office released it FY 2018 Report to Congress today.  The report comes out one year after Congress amended section 7623 in the Bipartisan Budget Act of 2018, which clarified the definition of proceeds includes non-Title 26 amounts such as criminal fines, civil forfeitures, and violations of reporting requirements.  This change in the statute has clearly transformed the program, increasing the total amount of awards paid in FY 2018 to more than nine…
Today the GAO released a study wherein they looked at the ability of the IRS to track and then pay awards on monies that are collected by the Government relating to “FBAR” violations.  Recall that FBAR stands for the “Reports of Foreign Bank and Financial Accounts”  and it represents information and return reporting requirements and associated penalties for violations thereof under Title 31’s Bank Secrecy Act.  The law on whistleblower awards changed on…
A report just released by TIGTA (the Treasury Inspector General for Tax Administration) shows that once again IRS audits of taxpayers are in decline.  Enforcement revenues are slightly up this year, but TIGTA says this is due to a small number of large corporate cases. Some highlights of the TIGTA report: “The number of staff assigned to Examination functions decreased 22 percent from FY 2013 to FY 2017, with a recent decline of 7 percent…
On March 9th, Tax Partner Scott Knott and I attended the Federal Bar Association Tax Law Conference in Washington, D.C.  Known colloquially as the “inside the beltway tax conference,” many high ranking federal government employees from DOJ, Treasury, and the IRS were in attendance and speaking on various new developments in the tax law. The key note speaker, Don Fort, Chief IRS Criminal Investigation (“IRS-CI”), spoke about the work of his division in the…
We get absolutely deluged with hundreds of calls a day during tax return filing season about all kinds of fraud, particularly identity related scams and claiming child exemptions improperly.  In 2016, there was a 400% increase in tax related phishing and malware attacks, and 969,000 potentially fraudulent refunds claiming up to $6.5 billion. You may be unaware that you’re a victim until you try to file your taxes and IRS tells you something’s wrong. Here…
Happy New Year! The new year brings a time to reflect back on the past year, on things that went well, things that went not-so-well, and how you would like to do things going forward.  In the spirit of looking back over the last year, the IRS Whistleblower Office released its FY 2017 Annual Report to Congress earlier than usual this year, right after New Year’s.  In FY 2017, the Whistleblower Office paid $33,979,873 in…
Many tax fraud cases also involve securities law violations.  For instance, corporations engaged in tax evasion may also be creating fraudulent financials or offering securities to investors by providing misleading or untruthful information.  The most common compliant categories reported by whistleblowers to the SEC in fiscal 2017 were Corporate Disclosures and Financials, Offering Fraud, Manipulation, and Insider Trading. The SEC’s whistleblower program is moving full steam ahead according to the 2017 Annual Report of the
Late on November 16th, the Senate Finance Committee voted to approve its iteration of the Tax Cuts and Jobs Act, passing the measure on a party-line 14-12 vote.  The full version can be found here.  Of particular interest to our readers here is one of the amendments that was added to this in committee.  Senator Grassley submitted a number of amendments to this bill including an amendment that: modifies section 7623 to define collected…
The IRS announced that whistleblower awards paid under section 7623 on or after October 1, 2017 and on or before September 30, 2018, will continue to be reduced by the “sequestration reduction rate”, which has now been lowered slightly to 6.6 percent.  The 6.6 percent fiscal 2018 sequestration reduction rate represents a .3 percent decrease from fiscal 2017’s 6.9 percent.  The sequestration reduction will unfortunately continue to be applied to whistleblower payments unless and…