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Compliance on the Cards...

Kitty Miv, Editor
25 November, 2020

As, at the time of writing, the transition period following the presidential election was starting in the United States (albeit still not without controversy...), it seems likely that there will be news of tax plans to come from the incoming administration in the next weeks and months.

However, despite the ongoing political upheaval there, things have not been exactly quiet in the US and the Americas more generally, and the IRS's specialist compliance teams revealed recently that they have significantly increased their focus on virtual currency tax issues during the 2020 fiscal year.

The newly published Criminal Investigation (CI) division's annual report highlights the agency's successes and criminal enforcement actions taken in fiscal 2020, the majority of which occurred during the COVID-19 pandemic. During the 2020 fiscal year, over USD10bn was identified as tied to tax fraud and other financial crimes, the report revealed.

The report showed that the key focuses of CI in fiscal year 2020 included COVID-19-related fraud, cybercrimes, with an emphasis on virtual and cryptocurrencies, traditional tax investigations, international tax enforcement, employment tax, refund fraud, and tax-related identity theft.

In response to COVID-19 related crimes, CI special agents quickly adapted their investigative techniques to initiate cases into fraudulent claims for Economic Impact Payments, Paycheck Protection Program loans, and refundable payroll tax credits from the Coronavirus Aid, Relief, and Economic Security Act, the IRS explained.

Possibly with this in mind, in its own annual report, the Internal Revenue Service Advisory Council (IRSAC), a federal advisory committee that provides an organized public forum for discussion of relevant tax administration issues between IRS officials and representatives of the public, issued recommendations in a number of areas. These included:

  • Funding of the IRS;
  • The Taxpayer First Act;
  • Expansion of e-File;
  • Proposal for an early exam program for Large Business;
  • Telephone response times for the Practitioner Priority Service;
  • Resources for Native American taxpayers and federally recognized tribes; and
  • Taxpayer Digital Communications.

In particular, the IRSAC called on the US Government to ensure adequate funding for the IRS over a sustained period in order to effectively staff the agency, provide adequate enforcement of federal tax laws and regulations, and successfully modernize its information technology systems and taxpayer service. It called on the IRS to ensure the Taxpayer First Act informs IRS operations, and called on the IRS to expand its online tax services offering.

Meanwhile, in Argentina, compliance matters were also on the menu, albeit from a slightly different perspective, with the Chamber of Deputies (the lower house of Parliament) announcing on November 18 that it had approved a bill to introduce a solidarity tax on wealthy individuals with assets of more than ARS200m.

The bill was approved by a slim majority, of 133 votes in favor to 115 against, with 2 abstentions. The measure will now go before the Senate.

Until next week!


About the Author

Kitty Miv, Editor

Kitty was born in Argentina in 1960 to a Scottish cattle rancher and his Argentine wife. Educated in Edinburgh and at Princeton, Kitty worked for the World Bank as an economist, where she met and married an emigre Iranian banker. During her time with the Bank, Kitty worked in a number of emerging markets, including a spell in the ex-USSR as a Transition Economies Team Leader. Kitty is now a consultant in Brussels and has free-lance writing relationships with a number of prominent economic publications. kitty@lowtax.net


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