IRS Enforcement Groups Help Criminal Investigators Choose Cases

Posted in Hot Topics on May 31, 2018 | Share

The Internal Revenue Service (IRS) has a Criminal Investigation Division (IRS-CI) that is responsible for investigating alleged tax fraud and tax crimes. The IRS-CI announced several new enforcement initiatives in August of 2017. Those initiatives are now up and running and are likely to result in more people being prosecuted for tax offenses.

Criminal charges for tax evasion, tax fraud, or related crimes can impact every aspect of your life. You could incur substantial costs in fines and legal fees, and could potentially even lose your freedom. You should reach out to a Washington DC criminal tax lawyer if you are concerned you'll be caught up in a new IRS initiative, if you've discovered you're the target of an investigation, or if you have been charged with a tax crime.

New IRS Enforcement Groups to Crack Down On Tax Offenses

There were two enforcement initiatives for 2018 that were announced by the IRS: the National Coordinated Investigations Unit and the International Tax Enforcement Group.

The National Coordinated Investigations Unit has been tasked with making use of data that IRS civil departments collect in order to identify patterns of taxpayer behavior that could indicate noncompliance with tax laws including underpayment of taxes. There are two main initiatives that the National Coordinated Investigations Unit is undertaking, including reviewing tax returns to identify questionable refunds and identifying tax return preparers who have manipulated client returns.

The International Tax Enforcement group is also making use of data analytics, but this group's goal is to effectively use data collected from the Offshore Voluntary Disclosure Program as well as to use data from the Panama Papers and treaty information exchanges that require foreign financial institutions to report information about accountholders. The goal is to identify taxpayers who have undeclared foreign assets who have not complied with reporting requirements related to offshore accounts.

On May 12, Chief Don Fort, the Criminal Investigation Division's Chief, indicated that both of these programs are now up and running. “We have literally tens of millions of records from various investigations and are pulling together information and making connections to select new cases,” Fort said in a speech given at a May Bar Association Meeting of the Bar Associations' Taxation Section.

Fort went on to say that the International Tax Enforcement Group has a strong computer data analytics tool that is currently operating to effectively evaluate data on both organizations and individuals. The National Coordinated Investigations Unit is working hand-in-hand with the International Tax Enforcement Group to fill in any investigative gaps and, when necessary, to forward leads on potential wrongdoing to appropriate field offices for further investigation.

The Criminal Investigation Division of the IRS is also reportedly working on identity theft issues and will be providing additional training to agents on cryptocurrency, which the IRS sees as an emerging threat to tax compliance and a new area for focus. 

Because these new investigative groups are now up and running, taxpayers with undeclared offshore accounts or other tax compliance issues should be aware that they are now at greater risk. It's important to contact Kevin Thorn, a Washington DC criminal tax lawyer, as soon as possible to explore options for resolving tax issues with the minimum of consequences.

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