Federal Bar Association Section on Taxation

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 areas of tax evasion, money laundering, the use of cryptocurrencies to conceal income, and terrorist financing. Mr. Fort highlighted that the mission of IRS-CI is to have a maximum deterrent effect and enhance voluntary compliance with the tax laws.  Mr. Fort said maximum deterrent effect comes from working with the DOJ to prosecute tax crimes that generate publicity or are highly visible to the public.  Enhancing voluntary compliance necessarily involves identifying tax crimes in the first place.  In that regard, Mr. Fort stated that whistleblowers are one of the most important sources of information for IRS-CI.

  • Mr. Fort closed by noting that even though his division has the same number of special agents as it had 50 years ago, IRS-CI continually investigates some of the most complicated cases in the agency’s history. According to IRS-CI’s Annual Report for 2017, international investigations have increased substantially from the 186 indictments in 2015, to 221 initiated in 2016, to 283 initiated at the end of 2017.  Indictments have increased correspondingly.

We have spoken to Mr. Fort in the past concerning criminal tax matters, some of which IRS-CI has taken action on, and Mr. Fort has encouraged us to forward relevant evidence of criminal tax evasion to his division. If you have information about criminal tax evasion, please contact The Ferraro Law Firm for a free consultation.

 

The IRS Whistleblower Program took center-stage again, this time at the Federal Bar Association Section on Taxation’s 2015 Law Conference in Washington, DC.  Scott led the lively panel discussion about the IRS Whistleblower Program with Kevin Gillin, Special Counsel in IRS Office of Chief Counsel (Small Business/Self-Employed); Robert Wearing, Branch Chief in IRS Office of Chief Counsel (Procedure & Administration); and George Clarke, Partner at Baker & McKenzie, LLP.  The panel covered recent program and litigation updates, and touched on confidentiality concerns. 

The update on the administrative program covered the Treasury Regulations that were finalized last August and the various audits and inquiries of the program.  Of great interest was the preview of the yet-to-be-released 2014 IRS Whistleblower Office report to Congress by Mr. Gillin:

On a general level, in terms of the number of submissions, the number of claims that result from those submissions, and the amounts that have been paid are going to be similar … to the 2013 report.

This is consistent with Director Whitlock’s statements at the Denver meeting of the ABA Section of Taxation in September, where he said that award payouts in Fiscal Year 2015 will be larger than the payouts in Fiscal Year 2014.  Scott noted that he believes that the number of submissions that are technically sound and do not face limitations on collection or evidentiary issues have remained steady as well, even though these numbers are not reported. 

The litigation updates provided a capsule review of the opinions of the Tax Court to date.  Mr. Wearing noted that the United States Tax Court has been “very methodical” and that “we see the court moving toward standard of review … we’re not really at the point of substantive fights over the meaning of terms in [section] 7623 or whether the award was an appropriate amount.”