Speaking at the ABA’s Annual Criminal Tax Fraud and Tax Controversy Conference, senior officials from the Tax Division of the Department of Justice (DOJ) and the IRS Office of Chief Counsel described a variety of priorities for civil enforcement.
Consistent with prior indications that payroll taxes will be a significant area of focused criminal enforcement, Diana L. Erbsen, Deputy Assistant Attorney General for Appellate and Review, indicated that practitioners should anticipate civil actions for injunctive relief in payroll tax cases, followed by contempt proceedings to enforce those injunctions. Erbsen also indicated that the Financial Litigation Unit of the Office of Review, which focuses on collecting tax judgments, has received additional staff and is expected to be more active.
Drita Tonuzi, Deputy Associate Chief Counsel for Procedure and Administration, noted that the transferee liability cases associated with intermediary transaction tax shelters are nearing the end of their life cycle. They are likely to be replaced with challenges to basket option transactions, which are now a listed transaction under Notice 2015-73, which was initially issued in October 2015, and will be applied to tax returns filed after January 1, 2011 that include a tax benefit related to one of these transactions. Presumably, the related basket contract transactions covered by Notice 2015-74 will also receive significant attention, although Tonuzi did not explicitly reference them.
Both Tonuzi and Erbsen noted the passage of the FAST Act, taxpayers with more than $50,000 in aggregate tax debt may have their passports revoked, which they both expect to increase collections.