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IRS to collaborate with state authorities to address tax evasion

On Behalf of | Oct 1, 2018 | Criminal Tax Issues

The Internal Revenue Service (IRS) continues its efforts to crackdown on tax evasion. The latest focus involves increased communication with state agencies.

Is this new? No. The IRS already collaborates with state and local agencies to help better ensure taxpayers are in full compliance with applicable tax laws. This effort focuses on how the IRS could better use a specific program: the State Audit Report Program.

According to a report by the Treasury Inspector General for Tax Administration, the IRS’ failure to properly use this program has likely resulted in the lost $285 million in collectible tax income. This is in large part due to the fact the IRS failed to investigate taxpayers flagged by the program who did not file tax returns for 2013 through 2016.

What is different? The government report specifically called on the IRS to focus on the following types of taxpayers flagged by the State Audit Report Program:

  • High earners
  • Repeat non-filers

The IRS agreed with the majority of the report and has stated it will make efforts to improve its collaboration efforts with state authorities. The agency notes the reach of the program is flawed as it is only currently used by 12 states.

What does this mean for taxpayers? This publication provides another example of efforts by the IRS to increase its efficiency in the investigation and prosecution of those who are not in compliance with tax laws. As such, anyone that needs to come into compliance is wise to consider proactively addressing the problem. The attorneys at Goldburd McCone can review your situation and provide guidance on available compliance options.