IRS Criminal Tax Enforcement in Times of COVID

The Joint Chiefs of Global Tax Enforcement, consisting of the IRS’s Criminal Investigation unit, with representatives of the UK, Canada, Australia, and the Netherlands (known as the Joint Chiefs of Global Tax Enforcement or the J5) meets yearly to discuss and cooperate on combating common tax evasion issues and challenges. This practice note provides an overview of recent developments in the area of international tax enforcement, including the role of cryptocurrency and the financial technology industry in tax evasion. Also discussed is how the COVID-19 pandemic is not only impacting the work of tax enforcement officials globally, but also potential tax policy and legislation shifts driven by the increased demands for governmental social and other benefit programs.

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  • Business Entities: IRS amplifies the guidance in I.R.S. Notice 2020-22, which provides for penalty relief under I.R.C. § 6656for an employer’s failure to timely deposit employment taxes with the IRS. The guidance provides relief from I.R.C. § 6656 for employers required to pay qualified sick leave wages and qualified family leave wages, and qualified health plan expenses allocable to these wages, mandated by the Families First Coronavirus Response Act, as amended by the COVID-related Tax Relief Act of 2020, and the American Rescue Plan Act of 2021. I.R.S. Notice 2021–24.
  • Employment: IRS indicates that it will accept electronic signatures on certain document filings for which a handwritten signature is normally required, including Section 83(b) elections. IRS Memorandum No. NHQ-10-0421-0002.
  • Excise Tax and Credits: The IRS adds vehicle models to its index of eligible vehicles for the I.R.C. § 30D credit for qualified plug-in electric drive motor vehicles. The new vehicles eligible for the credit are the 2022 BMW 745e xDrive, the 2022 MINI Cooper S E Countryman ALL4, the 2022 MINI Cooper S E Hardtop, and the 2021 Porsche Taycan EV. IRC 30D New Qualified Plug-In Electric Drive Motor Vehicle Credit.
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