US analyses big data to catch tax evaders


27th June 2017

The crackdown on tax evasion has been heating up for some time. And in the past week another huge step forward has been taken as it’s been revealed that US authorities are using big data to catch tax evaders – but what does that mean for the global fight against evasion?

Anyone familiar with the global tax arena – and regular readers of our blogs – will be aware that masses of legislation has been introduced in recent years. The Criminal Finance Bill is the latest to impact the UK market and there’s also been the introduction of the Common Reporting Standard to take into account. Even the Panama Papers scandal, whilst concerning, was also highly insightful and revealed the true extent of fraud and evasion around the world.

And if it’s been difficult to get away with tax evasion in the past few years, it’s about to get so much more challenging.

US uses big data to catch evaders

US authorities have revealed that they’re now using big data to catch tax evaders and have already deployed agents and data specialists to examine the enormous amounts of information collected from the Panama Papers, Swiss Banks and whistle-blowers around the world.

According to reports, the Department of Justice and the Internal Revenue Service are tracing accounts of Americans who have been relocated from Switzerland to other countries including Israel, Singapore and Hong Kong.

They’re pursuing so-called ‘leavers’, or citizens who moved their accounts to other offshore locales after Swiss banks came under investigation. Credit Suisse, for example, is facing a fresh enquiry into its financial practices despite pleading guilty to aiding Americans to evade taxes in 2014.

Don Fort, deputy director of the IRS’s criminal investigation division said, “I think there are areas of offshore tax evasion that still have to be pursued. The key is trying to tie that information together and follow the money and see where it leads.”

Shrinking resources

The move is a timely one as, unlike many other tax authorities, the IRS has had its resources cut by the US government and needs to find more cost-effective ways to pursue evaders. Enforcement staffing is down 25% since 2010 and agents have been diverted from traditional evasion investigations to tackle the rise of identity theft fraud in recent years.

However, with data now being analysed at a rapid rate it’s highly likely that the IRS’ conversion rate will only increase, despite the loss of resources and any agencies placing contractors should be aware of these changes. If you’re at all uncertain about your compliance status – or those of the contractors you’re placing, then contact the specialists before it’s too late.


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