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July 3, 2018


IRS accuses four of tax crime based on FATCA violation

The Foreign Account Tax Compliance Act (FATCA) is a tool the government uses to help better ensure United States citizens comply with tax obligations. This law requires foreign financial institutions to report information about United States customers to the U.S. government. Under this law, a foreign bank must report any account containing assets at or above $50,000.

The government recently used the violation of this law as a means to charge four individuals with tax crimes.

FATCA in action: Four charged with tax crimes for violation of this law

The Internal Revenue Service (IRS) charged four individuals with obstructing the agency’s functions in administration of the FATCA. The agency gathered evidence through an undercover operation to support these criminal charges.

The operation involved an undercover agent who contacted the group and stated he was interested in putting several millions of dollars into accounts. The agent allegedly stated he was a United States citizen and was never asked to provide information in compliance with the FATCA. The agent states he specifically requested the need to “circumvent the IRS’s reporting requirements under FATCA.” The government has accused the group of various crimes, including a failure to properly report this agent and other individuals as required by FATCA.

Criminal charge example just the start: IRS cracking down on tax evasion

A Deputy Assistance with the Attorney General stated that the “Justice Department and Internal Revenue Service are committed to investigating and prosecuting those who promote and facilitate the use of offshore bank accounts to evade U.S. tax.” Use of the FATCA as a tool to pursue these charges is just one option the government will pursue.

Those who have yet to come into compliance with reporting requirements can learn from this case. Options for compliance with United States tax laws are available. An attorney experienced in these matters can review your assets and discuss various options, such as the Offshore Voluntary Disclosure Program.

Tax Evasion