Recently released, the IRS-Criminal Investigation (IRS-CI) Annual Report offers an inside peek at the workings of the financial and criminal tax investigation activities of the IRS.
Given its broad mandate and relatively limited resources, it is always interesting to view how the agency allots those resources and the results they receive in return. Despite its tight budgetary strings, the IRS-CI usually delivers the best that it can, and the fiscal year running from October 1, 2020 to September 30, 2021 is no different.
Here are some highlights of the report:
- The IRS-CI spends the majority of its investigative hours on criminal tax matters. This includes abusive tax schemes, payroll tax issues, general tax fraud, international financial tax crime, corporate fraud, public corruption, cyber-crimes, and identity theft. The unit also pursues non-tax crimes like money laundering and general fraud, as well as narcotics investigations through the Organized Crime Drug Enforcement Task Force (OCDETF).
- During the 2020-2021 fiscal year, the agency identified $2.19 billion in tax fraud and $8.18 billion in other financial crime. The IRS-CI executed on 1,497 warrants and overall enjoyed an impressive 89.4 percent rate of conviction on matters prosecuted.
- The recent fiscal year saw enhanced pursuit of financial and tax crime around refund fraud. Refunds and stimulus monies intended to address business and economic stability during the pandemic became a target for fraudsters. Both the Questionable Refund Program (QRP) and the Abusive Return Preparer Program (RPP) take aim at businesses and individuals who file fraudulent tax returns and other documents to obtain illicit refunds and stimulus checks.
- The IRS-CI tax crimes unit initiated 1,372 investigations during 2020-2021. Of those, 850 individuals were recommended for prosecution and 633 were sentenced. Despite the pandemic downturn, the prosecution and sentencing rate of the agency remained high relative to the number of investigations undertaken.
- Non-tax crimes involve the pursuit of financial and currency violations around the country and around the world. The ease of operating in the digital domain encourages money laundering by individuals as well as larger crime collectives. As well, enforcement of the Bank Secrecy Act (BSA) continues to drive prosecution of offshore tax and other institutions that fail to report assets of American taxpayers held in foreign bank accounts. The non-tax crimes unit initiated 1209 investigations and recommended the prosecution of 1132 individuals. Of those, 635 were sentenced.
The IRS-CI is a busy place. If you believe you have caught the attention of the IRS, speak with an experienced criminal tax attorney soon in order to try and avoid becoming a statistic in the next IRS-CI Annual Report.
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With offices in Cleveland and Chicago, the legal team at Robert J. Fedor, Esq., LLC offers help with tax controversy, offshore tax matters, compliance issues, and guidance with business bankruptcy. Contact us today or call 800-579-0997.
