Top officials from the Internal Revenue Service’s Criminal Investigation unit have been meeting this week in Sydney with their counterparts from Australia, Canada, the Netherlands and United Kingdom to "review" and "set priorities" in their joint "fight against trans-national tax crime," the IRS has revealed.
The meeting was part of a program established under a directive issued by the OECD's Taskforce on Tax Crime, known as the Joint Chiefs of Global Tax Enforcement group, or "J5", the IRS said, in a statement on Wednesday evening.
The Joint Chiefs of Global Tax Enforcement was launched in 2018 after a call to arms from the OECD Taskforce on Tax Crime, and according to the IRS, has been working together since then "to gather information, share intelligence and conduct coordinated operations, making significant progress in each country’s fight against trans-national tax crime".
IRS chief of Criminal Investigation, Don Fort, said in the IRS statement that it was "very exciting" to "[see] the transformation of the J5 from a group of countries with similar challenges and similar goals to a fully integrated organization that is seeing operational successes".
He added: "The information shared, efficiencies gained, and investigations started based on the collaboration within this group have moved the needle by years in terms of results and successes.
"I expect 2020 will be a game changer for the J5, and criminals will not know what hit them."
The announcement of the J5 meeting came a day after the London-based Tax Justice Network announce that the U.S. had "leapfrogged" Switzerland to remain in second place on its global ranking of tax secrecy jurisdictions, known as the "Financial Secrecy Index", published every other year.
As reported, the TJN noted that "after initially agreeing to multilateral information exchange" with the rest of the world, "the US made a rapid U-turn" by its unilateral creation of its own tax information program, the Foreign Account Tax Compliance Act (FATCA), and since then had "refused to provide information to most other jurisdictions – despite continuing to insist, with menaces, on receiving information from others".
The announcement of the meeting of the J5 officials this week comes a little less than a month after the IRS revealed that, in partnership with the four other J5 tax authorities, it had undertaken what it called a "globally-coordinated day of action to put a stop to the suspected facilitation of offshore tax evasion".
In that Jan. 23rd statement, the IRS said its day of action was taking place "as part of a series of investigations in multiple countries into an international financial institution located in Central America, whose products and services are believed to be facilitating money laundering and tax evasion for customers across the globe."
It didn't name the financial institution located in Central America that it was referring to.
In today's statement, the IRS referred to last month's event, and although it didn't reveal the name of the Central American financial institution, it said that "evidence, intelligence and information collection activities such as search warrants, interviews and subpoenas were undertaken in each country, and significant information was obtained and shared as a result".
It said that the J5 group has been exchanging expertise, in order "to identify the most common and impactful mechanisms, enablers and structures that are being exploited to commit trans-national tax crim, and will be focusing on those criminals who present the greatest threat to the J5 countries in 2020".
Tax industry experts note that the U.S. is under pressure from other countries, including its fellow J5 members, to converge FATCA with the OECD's global version of FATCA, known as the Common Reporting Standard, or simply to move over to the CRS. This is because it's widely believed that the fact that under FATCA, U.S. financial institutions don't automatically exchange banking information on other countries' taxpayers – the way the more than 100 countries signed up to the CRS do – non-Americans who wish to hide their assets from their own governments are increasingly regarding such U.S. institutions to be their best option.
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