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The (somewhat surprising) role of the IRS Criminal Investigation division, part 1

| Mar 29, 2014 | Tax Crimes

Like any other organization, the IRS has judgment calls to make about its priorities.

Of course, in the best of all possible worlds the agency would have plenty of resources to assist taxpayers with compliance questions, as well as do an appropriate amount of auditing and investigating.

Unfortunately, in recent years federal budget woes have led to cutbacks in customer service by the IRS. At the same time, the work of the IRS Criminal Investigation (CI) division has been going strong.

In this two-part post, we will take note of some of the activities of the CI division.

In addition to the cutbacks in customer service, the shrinking size of the IRS’s overall headcount has also led to a decline in the number of tax audits. As has been widely reported, that number is now at its lowest in five years.

But an audit – as dreaded as that word is — is not a criminal investigation.

Let’s turn, then, to identifying some of the key aspects of the CI division’s mission.

What is surprising, at first glance, is that the CI is not only involved in investigating strictly tax crimes, such as tax evasion and tax fraud. It is also involved in investigating certain types of financial crimes.

To be sure, those crimes may have tax aspects. But most people would not realize that an arm of the IRS plays a role, for example, in investigating narcotics-related crimes.

The same is undoubtedly true of counterterrorism financing.

For financially-motivated crimes, the CI division is quite open about pursuing the objective of “tracking the crime to the criminal” (as the IRS puts it on its website).

In part two of this post, we will provide further discussion of the CI’s activities.

Source: IRS.gov, “What Criminal Investigation Does,” Accessed March 29, 2014

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