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Criminal investigations: Numbers down as IRS loses agents

On Behalf of | Dec 8, 2015 | Tax Crimes

Last week, the Criminal Investigation division of the IRS released its annual report for Fiscal Year 2015. The numbers tell a story of an agency that has had to cut back significantly on the number of investigations it initiates.

The cutbacks are not the result of a change in enforcement policy. As we will discuss in this post, they are the result of reduced resources.

As recently as Fiscal Year 2013, the IRS launched 5,314 criminal investigations. In FY 2014, the number fell to 4,297 – and in FY 2015 it fell again, to 3,853.

Obviously that is a precipitous drop. To go from more than 5300 investigations two years ago to fewer than 3900 this fiscal year is a fall of 27 percent.

But the number of investigators employed by the IRS’s Criminal Investigation division has been declining significantly as well. Due to budget cuts by Congress and employee retirements, the CI lost nearly 7 percent of its personnel in Fiscal Year 2015.

The number of Special Agents to investigate possible criminal activity stood at 2,316 at the end of September, compared to 3,363 twenty years ago. By next year, it is expected to be down to 2,166.

The reduced resources inevitably make it more difficult for the CI to fulfill its multiple responsibilities. Those responsibilities go beyond the enforcement of tax law. They also include the investigation of money-laundering schemes and other complex financial crimes. The CI also has its hands full in dealing with the challenge of tax refund fraud based on identity theft.

Of course, the IRS has certainly not folded its enforcement tent. Even with reduced resources, the CI still recommended more than 3,000 new cases for criminal prosecution in FY 2015. And the number of people sentenced on criminal charges in FY 2015 was actually higher than it was two years ago.

But the chief of the CI division, Richard Weber, has conceded that the budget cuts his agency has experienced will continue to impact its ability to conduct criminal investigations. No new Special Agents are expected to be hired next year.


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