IRS Criminal Investigators Stepped up Activity

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The Internal Revenue Service’s Criminal Investigation division began and completed a greater number of investigations of tax crimes last year as it continues to ramp up enforcement efforts.

A new report from the Treasury Inspector General for Tax Administration found that the CI division surpassed its goals for fiscal year 2010 in a number of areas. It surpassed its goal of completing 3,900 investigations by completing 4,325. The CI division also showed its efficiency in processing investigations both legal and illegal sources of income by reducing the average days elapsed to complete an investigation to 365 days, an approximately 8.8 percent improvement from the fiscal year 2009 average of 401 days. In addition, CI exceeded its fiscal 2010 goal of 4,000 initiated subject investigations by initiating 4,706.

The number tax investigation initiations of legal sources increased by 12.3 percent and the number of tax-related initiations increased by 10.6 percent. In addition, the number of subjects convicted of legal source tax crimes increased 6.9 percent from fiscal year 2009 and has increased 22.6 percent since fiscal 2006. The division used 71.2 percent of its time on total tax investigations, with 52.6 percent of that time devoted to legal-source tax investigations.

CI management attributed the increases to better management oversight, which includes emphasizing the need to complete initial interviews and the gathering of facts within the first few months of an investigation.

“I commend Criminal Investigation for this improved performance,” said TIGTA Inspector General J. Russell George in a statement. “Their work continues to be critical to IRS efforts to reduce the tax gap.”

CI is mainly dedicated to developing and investigating legal source tax cases, which are crimes involving legal industries and occupations and legally earned income.

In support of the IRS’s overall effort to reduce the tax gap, the CI division achieved improved performance during fiscal 2010 by committing resources to both legal and illegal source tax investigations and working with other IRS operating divisions to develop and investigate tax cases. During fiscal 2010, CI received approximately $658 million of the IRS’s Operating Plan budget to fund the criminal investigation programs that explore potential criminal violations of the tax laws, enforce criminal statutes relating to these violations, and recommend prosecution as warranted.

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