IRS Criminal Investigation

Criminal investigations at IRS are handled by the Criminal Investigation Division (CI) that operates through approximately 2,600 special agents.  Cases investigated by CI are reviewed by attorneys with the IRS Chief Counsel Office and then forwarded to the Department of Justice for further review and prosecution.  CI is the gateway for the IRS offshore voluntary disclosure program that offers qualifying taxpayers the ability to apply for a voluntary disclosure with the IRS and to settle their cases without criminal prosecution.  Activity in this area has increased greatly with dramatic IRS success in getting through foreign bank secrecy.

In 2012 CI initiated 5,125 investigations, it recommended 3,701 prosecutions and it obtained 2,637 convictions.  This is a 93% conviction rate.  It has offices in offshore locations and works with the tax agencies of foreign governments under Simultaneous Criminal Investigation Program areements that have been negotiated with six foreign governments.

The main objective of criminal prosecution is to demonstrate that the law  has teeth.  There is a big surge of prosecution recommendations in April 2013, which are highly publicized.  Additionally, signification convictions are advertised with press releases.

The biggest categories of cases are general fraud and money laundering.  Additionally, there are prosecutions involving abusive tax return preparers, abusive tax schemes, bankruptcy fraud, corporate fraud, employment tax, financial institution fraud, gaming, healthcare fraud, insurance fraud, mortgage and real estate fraud, narcotics, non-filers, public corruption and questionable refunds.  Non-filer investigations are expected to increase in coming years.