IRS Criminal Prosecutions Continue to Decline

The odds of being criminally prosecuted by the Internal Revenue Service have fallen as a result of budget cuts at the hands of Congress, decreasing from 13.3 per million population in fiscal year 2013 to 9.2 per million in FY 2015, according to new research.

The report, from Syracuse University’s Transactional Records Access Clearinghouse, or TRAC, noted that this is the lowest number during the Obama Administration. However, it is higher than during the preceding Bush administration. The number of prosecutions that originated as referrals from the IRS Criminal Investigation division was only 1,633 in fiscal year 2015.

The chances of a criminal prosecution from an IRS referral are only half the level of 25 years ago in the early 1990s.

The IRS did not immediately respond to a request for comment. However, a report last year from the IRS's Criminal Investigation unit confirmed that the agency opened fewer criminal investigations in 2014 (see IRS Opened 19% Fewer Criminal Cases in 2014, Reporrt Says).

The decline in the number of tax matters referred to federal prosecutors appears to correlate with the decline in the number of the IRS’s criminal investigators, which has been reduced 16 percent over the last five years.

The report includes figures from TRAC's free IRS criminal enforcement tool, now updated through fiscal year 2015, which provides a wide variety of ways to explore the agency's criminal enforcement activities at the district as well as national level.

A report last week from TRAC also found that IRS corporate audits also declined because of budget cuts (see IRS Business Audits Plummet Due to Budget Cuts). Congress agreed last December to add $290 million to the IRS’s budget for fiscal year 2016 (for a total of $11.23 billion) after five years of budget cuts, but the budget increases were earmarked toward improving taxpayer service, combatting identity theft, and improving cybersecurity, but not for criminal investigation.

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