Thursday, May 24, 2007
In addition JITSIC has decided to open a second office in London in fall 2007.
JITSIC, formed in 2004 by Australia, Canada, the United Kingdom and the United States, plans to broaden its focus. A press release issued by the IRS said that the group will share "best practices on risk assessment and other key areas of interest," and increase the "transparency of cross-border transactions in order to create a level playing field for taxpayers who are voluntarily compliant."
Friday, May 4, 2007
To fight offshore tax evasion, the U.S. needs to improve the exchange of information with other countries, several witnesses told the Senate Finance Committee at a hearing on May 3.
Senator Max Baucus (D-MT), the committee chairman, said the US can't track where taxes are being evaded because the government can't keep up with the speed of international trade, the International Tax Review reported.
"The heart of the problem is that the Treasury, the IRS, and American institutions know far less than they should," he said.
To read the statements of Baucus and Sen. Charles Grassley (R-IA) and the witnesses at the hearing, see the finance committee website.
Thursday, May 3, 2007
In a report released May 3, the Government Accountability Office found that I.R.S. agents are so hobbled by “dilatory tactics” by offshore taxpayers and other problems that it takes almost two and a half years to complete a typical audit.
The IRS reporter that almost $300 billion in investment and business income was moved out of the U.S. in 2003. Analysts with the Joint Committee on Taxation have estimated that the annual outflow has shot to more than $400 billion since then.
Underreporting income also is a problem, costing the government about $300 billion a year. Democratic lawmakers say the government could be losing tens of billions of dollars a year from offshore tax evasion.
The GAO found that offshore audits routinely become bogged down by stalling tactics by taxpayers, difficulties in getting financial information from foreign institutions and the technical complexity of many offshore transactions.
Audits can be pursued for more than three years, but agents have to meet tough requirements to do so. The Times said that IRS agents' findings can be dismissed and the agents reprimanded if the unpaid taxes turn out to be smaller than expected.