Journal of Financial Crime Volume: 10 Issue: 3 Dated: January 2003 Pages: 209-228
This document examines the use of taxation as an alternative means of bringing otherwise untouchable criminals to justice and putting illicit enterprises out of business.
Both America and Australia have achieved significant success through innovative laws that may serve as precedents in those jurisdictions that have not realized the potential of taxation as a weapon against organized crime. The potency of taxation as a weapon against organized crime derives from the fact that tax evasion gives rise to both civil and criminal sanctions. America pioneered the use of taxation as a weapon against organized crime through the work of the Internal Revenue Service’s Criminal Investigation Division. The success in securing convictions against criminal kingpins, particularly when all other efforts have failed is striking. In America, tax evasion can be prosecuted under an array of criminal statutes. To establish violation, the prosecution must prove three elements beyond reasonable doubt: (1) the existence of a tax deficiency; (2) an affirmative act constituting evasion or attempted evasion of tax; and (3) willfulness. Australia’s tax weapons are more versatile but are less frequently employed against persons that derive undeclared income from criminal activities. The successful enforcement of tax laws against organized criminals requires dedicated multi-disciplinary teams comprised of tax auditors, police investigators, lawyers, and accountants. The allocation of such resources to this work by government will inevitably deliver revenue positive outcomes. Tax laws are one of the most formidable weapons in any government’s arsenal for putting otherwise untouchable criminals out of business and in jail. The proactive enforcement of civil and criminal sanctions for tax evasion is indispensable in any effort to combat organized crime. 205 references
United States of America