The decreasing budget and staffing of the Internal Revenue Service’s Criminal Investigation unit are leading to a decline in the number of cases that special agents are able to handle, according to a new report.

The report, from the Treasury Inspector General for Tax Administration, pointed out that since FY 2011, reductions in staffing and funding for Criminal Investigation activities contributed to a decrease in the number and size of CI field offices throughout the country. For fiscal year 2016, the unit’s budget was approximately $576 million, down from $586 million in fiscal years 2015 and 2014, and $593 million in fiscal years 2012. Since FY 2012, the attrition of field special agents has also led to a decline in the number of cases initiated and completed by CI. In FY 2016, the unit initiated 3,395 cases, an overall decrease of 34 percent compared to the 5,125 cases initiated in fiscal 2012.

The percentage of cases initiated from functions within the IRS has decreased 5 percent from fiscal year 2012 to FY 2016. On the other hand, the percentage of cases initiated from the U.S. Attorney’s Offices and other government agency sources rose, representing 64 percent of the 3,395 cases initiated.

IRS Criminal Investigation trends

Overall, field special agents have consistently needed to maintain an average of 5.30 cases apiece, including international cases. In FY 2016, international cases that resulted in sentencing improved approximately 33 percent from FY 2012.

TIGTA identified a trend of special agents taking longer to turnover cases because of the extra time it takes for special agents to determine whether a case has prosecution potential. In FY 2016, it took an average of 540 days (or 1.5 years) to determine there was no prosecution potential, while it took an average of 422 days in FY 2012.

The head of CI contended the unit is using its resources wisely. “CI has pursued strategies to maximize the impact of our resources through conduct of investigations and support of the resulting DOJ prosecutions,” wrote IRS Criminal Investigation chief Don Fort in response to the report.

He noted that the unit has ensured that 70 percent of its direct investigative time is spent on tax-related charges. “CI’s 90 percent or higher prosecution referral and conviction rates, among the highest in federal law enforcement, further maximizes the impact of CI resources to help ensure the integrity and fairness of the U.S. tax system.”

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Michael Cohn

Michael Cohn

Michael Cohn, editor-in-chief of AccountingToday.com, has been covering business and technology for a variety of publications since 1985.