IRS CI’s FY 2021 Annual Report Spotlights Enforcement Priorities

Posted in Offshore Account Update on November 30, 2021 | Share

Each year, the Internal Revenue Service’s Criminal Investigation Division (IRS CI) releases a report highlighting its achievements over the past 12 months. IRS CI recently released its FY 2021 Annual Report; and, as usual, the report spotlights many of the division’s top enforcement priorities. As these priorities typically carry over into the following year, understanding where IRS CI focused its enforcement efforts in 2021 will be instructive for U.S. taxpayers seeking to avoid unwanted scrutiny in 2022. Washington D.C. tax attorney Kevin E. Thorn, Managing Partner of Thorn Law Group, explains.

Top 5 IRS CI Enforcement Priorities

Based on IRS CI’s FY 2021 Annual Report, here are five top enforcement priorities that are likely to carry over into 2022:

1. COVID-19 Fraud

COVID-19 fraud schemes have been a top concern for IRS CI and other federal law enforcement agencies since the start of the pandemic. The FY 2021 Annual Report indicates that IRS CI has placed particular emphasis on combating fraud involving the Paycheck Protection Program (PPP), Economic Injury Disaster Loan (EIDL) program and unemployment insurance (UI) programs. While these pandemic-related programs may no longer be available in 2022, IRS CI will continue to target individuals and businesses that defrauded these programs in 2020 and 2021.

2. Cryptocurrency Fraud

Of all of the assets that IRS CI seized during FY 2021, 93 percent were cryptocurrency. IRS CI reports that over the past few years it has, “prioritized training and the deployment of cryptocurrency, blockchain and open-source intelligence (OSINT) technologies to unravel complex cyber-financial criminal schemes.” The FY 2021 Annual Report also indicates that IRS CI plans to launch an Advanced Collaboration & Data Center (ACDC) in Northern Virginia in 2022 with the specific goal of further enhancing the division’s cryptocurrency fraud enforcement efforts.

3. Cross-Border Tax Crimes

Over the past few years, IRS CI has also devoted substantial resources to enhancing its cross-border enforcement capabilities. International tax fraud has long been a top enforcement priority for the division (and for the IRS as a whole), with particular emphasis placed on tax avoidance schemes, failure to report offshore assets, and the use of international financial systems to facilitate large-scale criminal enterprises.

4. High-Income Taxpayer Fraud

IRS CI’s FY 2021 Annual Report indicates that the division is paying particular attention to high-income taxpayers who fail to report (or fail to pay) their federal income tax liability. This includes business owners, executives, real estate and cryptocurrency investors, and others.

5. General Tax Evasion and Tax Fraud

During FY 2021, IRS CI devoted nearly three-quarters of its enforcement efforts to combatting general tax evasion and tax fraud. While IRS CI prioritizes certain high-value targets and enforcement areas, all U.S. taxpayers are at risk of facing scrutiny. For those who are contacted by IRS CI, it is important to engage an experienced Washington D.C. tax attorney as soon as possible.

Contact Washington D.C. Tax Attorney Kevin E. Thorn

If you have questions or concerns about facing an IRS CI investigation, we encourage you to contact us promptly. To request an appointment with Washington D.C. tax attorney Kevin E. Thorn, Managing Partner of Thorn Law Group, call 202-349-4033, email or contact us confidentially online today.

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