Five international tax enforcement heads, including from the Internal Revenue Service’s Criminal Investigation unit, have been meeting this week to discuss their joint initiatives for combating tax evasion.
The group of five leaders, known as the Joint Chiefs of Global Tax Enforcement, or J5 for short, represent the U.S., the U.K., Canada, Australia and the Netherlands. They have been meeting with each other on a yearly basis to discuss and work together on common tax evasion issues and challenges, but this year due to the pandemic they had to meet virtually. This year, the designated challenge they focused on involves the role of cryptocurrency and the financial technology industry in tax evasion.
Cryptocurrencies such as Bitcoin and Ethereum have become more of a priority in recent years for the IRS and other tax authorities abroad as they seek to uncover information on the quickly growing assets. Digital currencies have been used for money laundering, drug sales, human trafficking and other illicit activities, but they have also functioned as profitable investments for millions of people. The nature of the technology enables anonymous transactions, but the global tax enforcement chiefs warned Thursday that users would be mistaken to assume that cryptocurrency is untraceable by the authorities.
Last year’s challenge for the J5 also involved cryptocurrency, but this year’s challenge focuses specifically on crypto and fintech. “The value of these challenges really cannot be overstated,” said Jim Lee, chief of the IRS’s Criminal Investigation division, during an online press conference Thursday. “During a challenge, experts from each country with varying technical skill sets gather together with the mission of leveraging real data from a variety of open and investigative sources available from each country. Due to COVID-19, we’re unable to get everybody together in the same room, but I’m very excited about this virtual program. Using a variety of analytical tools, members from each country are put into teams with tasks for generating leads and finding tax offenders using cryptocurrency based on the data available to them during that challenge.”
He sees it as a way to break down barriers between the countries, work closely with their counterparts and share resources. The IRS-CI division will be lending one of its experts to the Australian tax authorities.
“I’m pleased to announce the commencement of a secondment of a senior officer from the IRS Criminal Investigation arm to the ATO in Australia,” said Will Day, deputy commissioner of the Australian Tax Office. “That has now commenced. It’s the first time that the ATO has had a secondment from an allied country. It’s a big milestone and it’s a great opportunity to continue to develop and…