According to Daily Tax Report the IRS has rescinded some criminal summonses from its crackdown on Malta pension plans, raising questions about whether the agency is backing off or retooling its aggressive campaign targeting the offshore tax schemes.
Three Attorneys Interviewed By Bloomberg Tax Said More Than 30 Of Their Clients Had Received A Withdrawal Letter Last Week.
The IRS declined to comment. It’s not clear whether the withdrawal letters represent a revision to the investigation’s focus into the potentially abusive schemes. If so, it would be a striking reversal after the agency sent out hundreds of
The brief letter, dated Dec. 4, specifies the agency hasn’t used any information or records collected by IRS Criminal Investigation, adding physical records will be returned and “any electronic responsive records have been destroyed.” The letter, signed by IRS Criminal Investigation special agent Brian Visalli, gives no rationale or legal basis for the agency’s decision, but advises taxpayers to retain any records responsive to the summons “as you may receive subsequent legal process for those records.”
Former IRS commissioner Charles Rettig said any adjustment to the criminal probe wouldn’t affect the current pattern of civil audits. “Withdrawing the Summons’ does not translate, at least not yet, into walking away from civilly examining the transaction,” he said in an emailed message.
Bryan Skarlatos, a partner in the New York office of Kostelanetz, characterized the action as “a recognition that the summonses were improperly issued” and a decision to “focus the criminal investigation more narrowly while allowing many of the civil audits to proceed.”
Tom Cullinan, a shareholder in the Atlanta office of Chamberlain Hrdlicka, suspects Criminal Investigation concluded it wouldn’t be able to demonstrate criminal fraud because the tax controversies boil down to technical interpretations of a treaty.
Ventry, the California law professor, said IRS shouldn’t back down if it has reasonable evidence of fraudulent conduct and to the extent the agency’s information demands might have been “over-inclusive,” the IRS could and should issue a narrower batch of summonses targeting the individuals and the conduct of greatest concern.
Carefully Review The Underlying Legal Requirements
Taxpayers who have already claimed the purported tax benefits of one of these four transactions on a tax return should consider taking corrective steps, such as filing an amended return and seeking independent advice.
Where appropriate, the IRS will challenge the purported tax benefits from the transactions on this list, and the IRS may assert accuracy-related penalties ranging from 20% to 40%, or a civil fraud penalty of 75% of any underpayment of tax.
Have a Maltese Pension Plan Problem?
Contact the Tax Lawyers at
www.TaxAid.com or www.OVDPLaw.com
or Toll Free at 888 8TAXAID (888-882-9243)
Over the years, questions have periodically been raised regarding leadership, hiring practices, ethics compliance, and accountability within the Internal Revenue Service's Criminal Investigation (CI) division. Critics have argued that several current and former senior officials should face greater scrutiny regarding hiring decisions, conflicts of interest, workplace misconduct allegations, and the handling of internal investigations.
ReplyDeleteAmong the concerns raised are allegations involving former IRS Criminal Investigation Chief Jim Lee. Critics have questioned his subsequent employment with Chainalysis following the award of government contracts to the company during his tenure. Those raising concerns have alleged that the circumstances warrant examination under federal ethics and procurement laws.
Additional allegations concern hiring practices during the period between 2021 and 2023. Some former employees have claimed that senior leaders encouraged aggressive hiring efforts that prioritized staffing levels over extensive vetting procedures. According to these allegations, inadequate screening contributed to later personnel actions, including employee terminations. Claims have also been made that certain field offices hired individuals whose backgrounds should have received greater scrutiny.
Questions have likewise been raised regarding the tenure of Chief Guy Ficco. Critics allege that misconduct involving employees connected to the National Criminal Investigation Training Academy was not properly addressed and that information provided during oversight reviews may have been incomplete or misleading. Allegations further suggest that investigations by the U.S. Office of Special Counsel and the Treasury Inspector General for Tax Administration examined aspects of these matters.
Some allegations also involve former Acting Deputy Chief Justin Campbell. Critics contend that information provided during investigative reviews was inaccurate and was supplied under direction from senior leadership.
Further concerns have been raised regarding alleged misconduct by employees who reportedly possessed information about past conduct involving senior officials. According to critics, the alleged misconduct included improper use of government time, misuse of funds, and actions potentially implicating prohibited personnel practices.
Former Chief Don Fort has also been the subject of allegations from critics who claim taxpayer funds were improperly used in connection with personal relationships involving subordinates. Additional allegations assert that members of senior staff were aware of the conduct and failed to report concerns through appropriate channels.
Questions have also been raised regarding oversight of incidents allegedly occurring at the National Criminal Investigation Training Academy. Critics argue that individuals with knowledge of potential misconduct failed to report concerns despite annual ethics training requirements and reporting obligations.
Another issue cited by critics involves former Deputy Chief Eric Hylton. Allegations have been made concerning potential conflicts of interest arising from employment decisions following government service. Specifically, critics have questioned whether post-government employment with organizations previously subject to oversight created appearance concerns.
Taken together, these allegations have led some current and former employees to argue that IRS Criminal Investigation leadership has faced recurring questions regarding transparency, accountability, ethics compliance, and oversight. At the same time, allegations alone do not establish misconduct.
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