Skip links

The New Age of International Criminal Tax Enforcement

By Caroline D. Ciraolo and John D. (Don) Fort
Journal of Tax Practice & Procedure
Winter 2020 Edition

The current global economic landscape presents challenges for tax authorities around the world—reduced tax revenue, limited resources for compliance and enforcement, and increased risk of noncompliance. In the face of such challenges, governments are balancing taxpayer service with the need to refocus and maintain enforcement. In the United States, senior-level Internal Revenue Service (“IRS”) officials have recently been vocal about enforcement priorities, with the most visible example being the establishment of the Office of Fraud Enforcement (“OFE”) within the Small Business/Self Employee operating division to better coordinate potential fraud. It should not be lost on readers that the OFE is headed by a long-time IRS Criminal Investigation (CI) employee, whose last position with IRS-CI was the Director of International Operations. Countries are working closer together to leverage and share information and resources to identify criminal tax operations and to hold those involved accountable. The United States has been a critical player in these efforts, establishing the Joint Chiefs of Global Tax Enforcement (“J5”) in 2018 and working closely with its treaty partners in cross-border investigations. Taxpayers and their advisors need to be aware of developments on the world stage and avoid the associated risk in their personal and professional financial operations.

“IRS-CI” employs 2,030 special agents, down from its high water mark of 3,363 special agents in 1995, but these agents are expert financial investigators and focus on high impact cases with strong general deterrence. In Fiscal Year (FY) 2020, IRS-CI initiated 2,596 investigations, recommended 1,859 prosecutions, and assisted the U.S. Department of Justice (“DOJ”) in obtaining 1,512 indictments and information. Of the investigations initiated during this period, 242 involve international enforcement issues and operations. This reflects a 13 percent increase from FY 2019.


Click here for the full article