THE federal and CNMI governments have formed a joint partnership to go after persons committing tax fraud.
Victor Song, special agent of the Criminal Investigation Office of the Internal Revenue Service, said the IRS is beginning a partnership with the CNMI Attorney General’s Office and the U.S. Attorney’s Office to “reinvigorate” efforts to prosecute U.S. citizens who are falsely claiming CNMI residency status to take advantage of the tax situation in the commonwealth.
“Evidently, there are a number of U.S. citizens that are filing false resident status and taking advantage of the CNMI rebate system,” said Song during a press conference.
He said the number of suspected fraud cases is significant enough for the IRS to establish a partnership with AGO.
He said the violators are mostly business people who have legal or illegal income and are taking advantage of the tax system in the CNMI.
“It is greed that drives white collar crime. They’re falsely claiming their residency in the CNMI and they are saying their income is earned within the CNMI so they can benefit from the rebates when in fact it is income earned outside the CNMI,” he added.
Song said anybody who will call the IRS hotline and provide information will be entitled to “cash rewards” of up to $25,000 depending on the taxes recovered or collected based on the information given.
Attorney General Robert T. Torres said the CNMI government and his office are committed to work with the IRS “to see to it that we can prosecute these cases aggressively to deter any abuse of our tax privileges.”
He added, “(The tax rebate system) is a privilege afforded to the residents of the CNMI and we will not allow people who would come here to take advantage of the system for their own ill-gotten gain.”
He said the CNMI “appreciates the efforts of the IRS and its agents in having an agent station here so that we can work collaboratively.”
In a press release, Torres said he and Finance Secretary Frank Villanueva support the IRS efforts to prosecute people who falsely claim CNMI residency to avail themselves of lower tax rates.
“The commonwealth will not tolerate misrepresentation or fraud by these non-resident taxpayers and will not support these fraudulent practices,” Torres said.
The commonwealth, he said, is targeting taxpayers that are misrepresenting their sources of income to obtain higher rebates.
“These misrepresentations represent significant loss of tax revenue to the commonwealth,” said Torres, adding that the Division of Revenue and Taxation will soon hold a seminar on what is CNMI-sourced income and what is not.
