IRS reports success prosecuting criminal cases
Anyone who substantially underreports their income on their tax return should consider the consequences.
The IRS Criminal Investigation (CI) special agents are well-trained in finding income tax fraud and other tax crimes. The IRS announced they had a 90.6% conviction rate on cases accepted for prosecution in FY22. FY22 is the 12-month period ending on June 30, 2022.
“Our team follows the money,” said IRS-CI Chief Jim Lee. “We’ve been doing it for more than 100 years, and we’ve followed criminals into the dark web and now into the metaverse. Tax and other financial crimes know no borders. If you violate the law and end up in the crosshairs of an IRS-CI special agent, you are likely going to jail.”
IRS Criminal Investigation agents are responsible for financial crime investigations, including tax fraud, money laundering, narcotics trafficking, public corruption, healthcare fraud, identity theft, and more. The IRS has been increasing crypto enforcement.
Criminal Investigations can be initiated from information received from within the IRS when a revenue agent (auditor), revenue officer (collection), or investigative analyst detects possible fraud. Information is also routinely received from the public.
Lying in an audit can trigger a criminal investigation. Auditors may ask questions when they already know the answer. Making intentional omissions or misrepresentations to an IRS auditor can result in a much worse situation leading to a special agent investigation or even a criminal indictment.
The CI has about 2,000 special agents spent. They spent almost 70% of their time on tax-related crimes like tax fraud and tax evasion during FY22. The other 30% of their time was spent on crimes like money laundering and drug trafficking cases.
The IRS has 20 CI field offices in the United States and 12 posts abroad.
In 2022, the CI team expanded partnerships with foreign counterparts to discover tax and financial crimes outside the United States.
Criminal Investigation special agents delivered training in countries like Germany, Argentina, and Colombia in crimes ranging from cybercrime to human trafficking.
The CI joined Taskforce Kleptocapture in March 2022 to find Russian oligarchs and other sanction evaders. The CI also worked with the Chiefs of Global Tax Enforcement to find sanction evaders and sanctioned assets as a result of their global strategy to deter Russia’s aggression. As of September 2022, the CI had identified almost 50 people and entities for potential sanctions-related enforcement.
“The cases the IRS-CI team investigated over the past fiscal year touch multiple continents and require cooperation with partners around the globe. This is why IRS-CI continues to cement itself as the preeminent law enforcement agency investigating financial crimes on a global scale,” said IRS Commissioner Chuck Rettig.
David Zubler is a tax accountant and Enrolled Agent in East Tennessee, providing tax strategies and representing clients before the IRS and has over 25 years of tax experience. He is the author of six tax books and has shared tax advice on national TV. He is the founder and president of Your Tax Care. The company provides business and tax education, including David’s one-minute tax tip radio recordings at YourTaxCare.com. David can be reached at (865) 363-3019 or contacted by email at email@example.com.