IRS Hiring Special Agents…Now That OVDP Protection Has Ended
- 1 Increased IRS Enforcement of International Evasion & Fraud
- 2 When Does the Hiring Begin?
- 3 What are Special Agents?
- 4 How do the IRS Special Agents Operate?
- 5 Do NOT Directly Speak with IRS Special Agents
- 6 How Does a Tax Criminal Investigation Begin?
- 7 The Special Agents Contacted me, Now What?
- 8 International Tax & Offshore Compliance are IRS Priorities
- 9 How You Can Avoid the Fate of Manafort and Others
- 10 What if You Never Reported?
- 11 We Specialize in Safely Disclosing Foreign Money
- 12 4 Types of IRS Voluntary Disclosure Programs
IRS Hiring Special Agents…Now That OVDP Protection Has Ended
As many experienced practitioners will tell you, the end of OVDP signals a nail in the coffin for many taxpayers seeking amnesty under the traditional offshore program. Yes, the Streamlined Program and Reasonable Cause are still available, but only OVDP facilitated a means of safe compliance for willful taxpayers, and non-willful taxpayers seeking to avoid audit (or take a particular tax position on more complicated investments).
Taxpayers can still disclose under the traditional IRM IRS Voluntary Disclosure Program, but the terms and conditions are different than OVDP (although oftentimes they may be more favorable).
Increased IRS Enforcement of International Evasion & Fraud
- It started with the implementation and enforcement of FATCA Reporting (110 Countries, +300,000 Foreign Financial Institutions)
- In addition, the IRS developed a renewed interest in FBAR Penalties
- Then the IRS developed two main new units of tax enforcement (one dedicated solely to International Tax)
- The IRS enters into numerous non-prosecution agreements worldwide.
- The IRS announces the end of the OVDP
- The IRS joins J5
- …Now the IRS states it is hiring ~250 Special Agents
When Does the Hiring Begin?
According to deputy chief Eric Hylton,
“The IRS Criminal Investigation division will be hiring almost 250 new special agents over the next 18 months.”
What are Special Agents?
The purpose of the IRS special agents is to launch the criminal investigations involving potential tax fraud, tax evasion, money laundering, or other types of tax crimes.
How do the IRS Special Agents Operate?
Depending on the information the special agents gather from you, it will determine whether they decide to either close the case, or refer the case to the Department of Justice for prosecution.
Usually, if there is any evidence that could be taken as you committing a form of tax fraud or evasion, your case will be referred for criminal prosecution.
Many times, when the special agents approach, they will play the “good cop, bad cop” roles. The purpose of this is to try to make you feel comfortable enough to begin talking to them – without the benefit of having an attorney present
Do NOT Directly Speak with IRS Special Agents
It is highly recommended that you do not speak with them at that time. It is not fair that they are attempting to catch you off guard without giving you an opportunity to gather and organize your thoughts. In addition, you will be much better off if you have an experienced tax attorney present with you during questioning-which is your right.
Please keep in mind that a CPAs and/or enrolled agents do not have the same privileges as an attorney. Specifically, a CPA or enrolled agent does not have a privilege involving criminal information that you provide to him or her. Thus, your CPA and/or enrolled agent, could be called for questioning involving the information you provided to them.
How Does a Tax Criminal Investigation Begin?
There are many different ways in which the Internal Revenue Service may get wind of your tax situation. The following example is the primary way in which the IRS determines whether it is going to bring criminal charges by way of an IRS Special Agent investigation.
The Special Agents Contacted me, Now What?
If you are ever approached by Special Agent, no matter how smart you think you are or sure you are that you’ve done nothing wrong – you must fight the urge to say anything to the special agent. The special agents represent the criminal investigation unit of the Internal Revenue Service. Their purpose is to conduct an investigation of you to determine whether they should refer the matter for criminal charges.
Since technically you are not under arrest or being interrogated, you are not entitled to an attorney. Moreover it is not past the special agents to conveniently inform you that you should still probably speak to an attorney first. In other words, the special agents are not going to do you a courtesy and tell you to not respond to their questions – it is not equivalent to being under arrest or custody/confinement by police and thus you will normally not be read your Miranda right.
No matter what the special agents tell you, let me make this perfectly clear: the IRS agents do not go around investigating everybody. They only investigate people they believe are guilty, which is why if you have been contacted by the IRS Special Agents, you must contact an attorney.
International Tax & Offshore Compliance are IRS Priorities
There are many different issues that the new international tax enforcement groups will focus on. They include:
- Foreign Tax Credit
- Foreign Earned Income Exclusion
- Offshore Tax Evasion
- International Cryptocurrency
- FATCA Crimes
- FBAR Crimes
How You Can Avoid the Fate of Manafort and Others
Presuming the money was from legal sources, your best options are either the Traditional IRS Voluntary Disclosure Program, or one of the Streamlined Offshore Disclosure Programs.
What if You Never Reported?
If you never properly reported your foreign income or accounts, you may qualify for one of the IRS tax amnesty programs/voluntary disclosure programs. You may also qualify for a reduced penalty — or even a penalty waiver!
We Specialize in Safely Disclosing Foreign Money
We have successfully handled a diverse range of IRS Voluntary Disclosure and International Tax Investigation/Examination cases involving FBAR, FATCA, and high-stakes matters for clients around the globe (In over 65 countries!)
Whether it is a simple or complex case, safely getting clients into compliance is our passion, and we take it very seriously.Be Careful of the IRS
With the introduction and enforcement of FATCA for both Civil and Criminal Penalties, renewed interest in the IRS issuing FBAR Penalties, crackdown on Cryptocurrency (and IRS joining J5), the termination of OVDP, and recent foreign bank settlements with the IRS…there are not many places left to hide.
4 Types of IRS Voluntary Disclosure Programs
There are typically four types of IRS Voluntary Disclosure programs, and they include:
- Traditional (IRM) IRS Voluntary Disclosure Program
- Streamlined Domestic Offshore Procedures (SDOP)
- Streamlined Foreign Offshore Procedures (SFOP)
- Reasonable Cause (RC)
Contact Us Today; Let us Help You.
Sean holds a Master's in Tax Law from one of the top Tax LL.M. programs in the country at the University of Denver, and has also earned the prestigious Enrolled Agent credential. Mr. Golding is also a Board Certified Tax Law Specialist Attorney (A designation earned by Less than 1% of Attorneys nationwide.)