Speed Read: There is a strong relationship between the revenue authorities of the UK and US. In matters of tax compliance, the US tend to get there first. The US was the first to realise the significance of tax shelters and how they can erode the tax base. The IRS solution was to identify those who engaged in practices deemed to be abusive. As a result of the IRS experience, DOTAS was introduced in the UK in 2004. It is likely that in the next few years we will see significant strengthening of the various initiatives that HMRC has already adopted from the IRS. Also, the IRS uses criminal sanctions as a key part of their strategic crackdown on tax compliance. In the UK, there is anecdotal evidence that HMRC are also steadily increasing the number of criminal prosecutions.
