The IRS Criminal Investigation Division (IRS-CI) reviews criminal fraud allegations in light of the Internal Revenue Code, Bank Secrecy Act as well as money laundering statutes. If referred for prosecution a case then transfers to the Department of Justice.
Once a criminal investigation is initiated what are the options? How does the IRS determine which cases to send for criminal prosecution?
Revenue agents, officers, the public and law enforcement
Similar to any other types of criminal matters, there are many ways an investigation might be initiated. What is unique is a civil tax audit and/or collection case can also lead to a criminal investigation if a revenue agent (auditor) or revenue office (in collections) identifies any evidence of fraud.
What is the first stage of a criminal investigation?
A special agent is assigned to review the case and determine whether enough evidence exists to potentially bring criminal charges. This preliminary review is the “primary investigation.”
Then a review by a front line supervisor occurs. The head of the office also completes a review and must approve before the investigation moves forward. When a special agent in charge begins the “subject criminal investigation” there have already been two levels of managerial review.
Surveillance, interviews, etc.
Like any law enforcement officer, IRS special agents will use investigative techniques to gather more evidence. These may include:
- Subpoenaing bank records
- Interviewing business associates or employees
- Conducting surveillance
- Executing warrants
At this stage you are on notice and need to act quickly to obtain skilled counsel to protect your interests and resolve the issues before the case is referred to the Department of Justice. Once a case is referred to a prosecutor the goal is a conviction and the agency has a high success rate.