On 15.11.18, Reuters reported that Tax enforcement agencies from the United States, Australia and 3 other countries, part of the J5 alliance, are leading a crackdown on “professional enablers” of international tax fraud, the US Internal Revenue Service head of criminal investigations has said.

The IRS, via an alliance with Britain, Australia, Canada and the Netherlands set up earlier this year, is pursuing individuals and firms that facilitate tax evasion, IRS Chief of Criminal Investigations Don Fort told reporters in remarks that give fresh details of the project.

“We are looking at enablers that are advertising their services to individuals in multiple countries, that are advertising tools that can help you evade your taxes”, he said, adding that the probes may ultimately lead to financial firms.

You investigate and you see where the money goes – inevitably it leads you to many levels, many different individuals and many different facilitators”, he said, with the IRS looking at the role of at community banks and smaller financial firms some money launderers may use.

The Joint Chiefs of Global Tax Enforcement (J5) alliance was launched in July 2018 to boost the fight against global tax evasion and money laundering, after calls by the OECD for better cross-border coordination.

Her Majesty’s Revenue and Customs (in the UK), has launched criminal investigations on more than 200 individuals and firms that make money by facilitating tax evasion.

Cryptocurrencies are a key part of the J5’s work, Fort said, citing the risk that such coins are used in the United States to avoid capital gains taxes. Digital money can be used to transfer funds to people without the need for foreign bank accounts, he added.

The IRS is looking at the involvement of cryptocurrency exchanges and financial firms in withdrawals of digital money, and their conversion to government backed “fiat” currencies.

“One of the ways to track cryptocurrencies, is to focus on when the actual cryptocurrency enters the system – folks want their money, and when it comes out, is what we are focused on”, Fort said.

FJM 2.12.18

[Reuters website: International Tax Fraud Enablers; LTN 223, 19/11/18; Tax Month – November 2018]


CPD questions (answers available)

  1. Is J5 cracking down on ‘professional enablers’ of international tax fraud?
  2. Who are the member nations of J5?
  3. Are they looking at enablers who are advertising services to individuals in multiple countries?
  4. Do they investigate where the money goes?
  5. Do they focus on when the ‘cryptocurrencies’ emerge?
  6. How may criminal investigations did Her Majesty’s Revenue and Customs launch?

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