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Uptick in criminal investigations noted in IRS report

On Behalf of | Feb 28, 2014 | Tax Crimes

The IRS wears several hats.

For most taxpayers, the IRS is merely the rather faceless government agency that oversees compliance with tax-filing and payment requirements.

To be sure, that work is an important part of what the IRS does. But besides tax collection and civil compliance, the IRS also wears another, law enforcement-type hat. Its Criminal Investigation (CI) division has seen significant increases recently in the actions it has taken against taxpayers suspected of criminal violations.

In this post, we will take note of a report issued by the CI division this week that shows the extent to which investigations and prosecutions of suspected tax crime have increased.

The report covered fiscal year 2013. It showed that the number of investigations went up by 12.5 percent compared to the year before. There was also an 18 percent increase in cases referred for possible criminal prosecution.

One striking thing about these increases is that they came at a time when overall resources in terms of available IRS agents went down by more than 5 percent.

In other words, the IRS seems to be prioritizing criminal investigations. Despite the constant budget pressure the agency as a whole has been under, the CI division of the IRS has seen its workload and output increase.

In FY 2013, the CI division opened 5,314 cases. And it recommended criminal prosecution in 4,364 cases. Many of these cases involved tax refund fraud based on identity theft.

Not all of the suspected crimes investigated by the CI division are tax crimes. The CI division also investigates other financial crimes.

Source: IRS.gov, “IRS Criminal Investigation Issues Annual Report,” Feb. 24, 2014


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