Detection: The IRS Data-Mining Program
‘Big Data’ is the future. With this digital age of transparency, we create 2.5 quintillion bytes of data every day. The game-changers – companies like Amazon, Google, Facebook and Linkedin have been masters at taking our own data and giving us very specific and personalized recommendations for products, services, friends, food, business partners, hobbies, investments, doctors….frankly, in everything that touches our lives.
Now the IRS has taken a lesson from the game-changers and has created the E-trak Offshore Voluntary Disclosure system in order to proactively find non compliant US taxpayers.
Counsel Jay Nanavati at Baker Hostetler has published an outstanding article Why Holders of Foreign Bank Accounts Need to Worry About IRS’s Voluntary Disclosure Data-Mining Program in Bloomberg BNA on August 28.
U.S. taxpayers who are still considering whether to disclose their accounts need to understand that the IRS’s data-mining software, increases their risk of being detected. Additionally, the phasing in over the coming year of the Foreign Account Tax Compliance Act (FATCA) will only increase the breadth and depth of the data available to the IRS and E-Trak. Taxpayers should act accordingly and seek legal advice immediately, he warns, as taxpayers whose accounts IRS has discovered are ineligible to participate in the Offshore Voluntary Disclosure Program (OVDP).
Taxpayers with undisclosed accounts have options as previously discussed, it’s important to find out your alternatives and to get out in front of the IRS before it’s too late.
Please call or write us to get more information.