July 20th, 2014
“New York Citys Department of Finance has reached an agreement with the U.S. Treasury that will give local officials access to the Financial Crimes Enforcement Network (FinCEN). This federal database will give the city a new financial and analytical tool to use in the investigation of tax evasion. Because income from individuals and businesses is self-reported, it is estimated that the city is owed billions of dollars in unpaid and under-reported taxes.
The Financial Crimes Enforcement Network tracks suspicious financial activity including large cash transactions and money transfers into foreign bank accounts. According to Michael Flowers, the director of the citys Financial Crime Task Force , access to this information gives enforcement agencies a significant advantage in tracking the financial activities of businesses or individuals who arent paying city taxes.
Gaining access FinCEN is just the latest move by the NYC Finance Department to combat tax evasion. Last year the department hired more than two dozen additional auditors. The department may hire additional auditors and is also considering developing a whistleblower program modeled on the IRS program. The IRS Whistleblower Office pays money to people who blow the whistle on persons who fail to pay the tax that they owe. If the IRS uses information provided by the whistleblower, it can award the whistleblower up to 30 percent of the additional tax, penalty and other amounts it collects.
The IRS whistleblower statute provides an important tool in law enforcement, says Joel Androphy, attorney and partner at the prestigious Nationwide law firm of Berg & Androphy.”” Any efforts that provide more opportunity for citizens to discover tax fraud benefit the countrys financial health.”””