American tax authorities have increased the number of criminal investigations into individuals and firms they suspect of evading tax bills.
The aggressive stance on chasing tax dodgers has also led to an increase in convictions.
In a report published by the Internal Revenue Service (IRS), the number of criminal investigations under way rose by 9% last year.
The IRS says the investigations are necessary to help maintain confidence in the country’s tax system.
Richard Weber, who is the IRS’s chief of criminal investigation, says actions are launched when potential criminal violations are suspected and to enforce taxpayers compliance with the law.
Convictions up 12%
He added: “We persevere and dedicate ourselves to working complex financial investigations to stop tax fraud, offshore tax evasion, identity theft, money laundering, public corruption and other financial crime.”
The result has also seen convictions for tax dodging increase by 12% last year while the number of indictments against people and companies grew by 13%.
The IRS began 5,125 criminal investigations in 2012 and completed 4,937, a rise of 5% on the year before.
The work of the criminal investigations team from the IRS led to 2,634 convictions with an impressive conviction rate edging up slightly to 93%.
The report also reveals that the prison terms being handed down are also on the increase and vary from 29 months to 71 months, depending on the conviction.
The result, which comes despite a drop in the number of investigators, also saw assets worth £500 million seized and £64 million in unpaid taxes collected.
Expat tax service
Many US-based tax experts are predicting that the report for this year will show another rise in investigations and convictions as the US pushes for a bigger tax take from taxpayers based overseas – America is the world’s only country which taxes its citizens no matter where they live.
Meanwhile, the IRS has launched a new service to help its expats living and working overseas comply with the complex American tax laws.
Called the ‘International Topic Index’, it will help expats understand the law’s requirements and help them file accurate tax returns.
The idea is for US taxpayers to quickly find the relevant information from the IRS’ international pages, including any forms that need to be filled in, tax FAQs, publications and instructions and other sources of information.
The information has been gathered in groups using IRS international tax knowledge and will point visitors to what they are looking for.
Potential visitors should be aware that the international index is not housed on the IRS website but on another government website.
For more information go to the IRS tax map https://taxmap.ntis.gov/taxmap/internationalindex.htm
