IRS Criminal Investigation Update

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IRS Criminal Investigation Update

• Marsha L. Griffith
• Director, Refund Crimes, Field Operations and
  Policy
• November 6, 2007

2
Overview

• IRS Criminal Investigation
• IRS Strategic Plan
• CI Business Plan
• FY2007 Year in Review and FY2008 Compliance
  Strategies
• Case Highlights

3
IRS Criminal Investigation Overview

• 4,100 employees worldwide
• 2,700 Special Agents
• IRS Criminal Investigation is the only agency
  with jurisdiction over Title 26 violations
• Violations of tax laws are our primary focus!
• One of the highest convictions rates in federal
  law enforcement.
• Above 90 since CIs inception in 1919

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IRS Strategic Plan CI Business Plan

• IRS Strategic Plan
• Service Enforcement Compliance
• Improve Taxpayer Service
• Enhance Enforcement of the Tax Law
• Modernize the IRS through its People, Processes
  and Technology

• CI Annual Business Plan Compliance Strategies
• Abusive Tax Schemes
• Non-Filers
• Refund Crimes
• Employment Tax
• Corporate Fraud
• Money Laundering/Bank Secrecy Act
• Counterterrorism
• Organized Crime Drug Enforcement Task Force
  (OCDETF)

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FY07 Statistical Highlights

• Case Initiations up nearly 8 over last year -
  4211.
• Also up
• Completed investigations
• Prosecution Recommendations
• Indictments
• Convictions
• And Sentencings.
• Publicity Rate is at all time high 79.7

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Impact of Enforcement on Taxpayer Compliance

• In a report published by Dr. Jeffrey Dubin,
  California Institute of Technology, in July 2007,
  he discusses . . .
• the impact on compliance can be experienced
  whenever publicity is received. Media coverage
  acts as a form of indirect contact with the
  general public and provides the greatest amount
  of exposure for CI activities. Attention from
  the media would seem to be the most likely forum
  through which taxpayers become aware of the
  likelihood that their crimes will be detected.
• Successfully prosecuted and sentenced cases that
  receive some media attention would appear to be
  most relevant to the question raised above

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FY07 Direct Investigative Time

• DIT for Counterterrorism was 2.6 in FY07.

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Corporate Fraud and Employment Tax Fraud
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Abusive Tax Schemes

• Schemes are usually complex involving multi-layer
  transactions for the purpose of concealing the
  true nature and ownership of the taxable income
  and/or assets
• Most common Abusive Trusts
• 92.9 Conviction Rate
• Sample Case

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Non-Filers

• Frivolous Arguments
• For both individuals and business employment
  taxes
• 14.0 DIT
• 94.8 Conviction Rate
• Sample Case

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Refund Crimes

• Abusive Return Preparers Questionable Refunds
  Schemes
• Identity Theft
• CI Fraud Detection Centers Co-located at IRS
  Processing Campuses
• Sample Cases

12
Money Laundering / BSA

• Tax Evasion in Progress
• To hide untaxed income from illegal sources
• Bank Secrecy Act
• Joint effort with SBSE
• SAR Review Teams
• CI is the largest user of BSA data

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Narcotics

• Continued Support of National Drug Control and
  Money Laundering Strategies
• OCDETF
• Provide Financial Expertise to Dismantle and
  Disrupt Major Drug Trafficking Organizations
• 11.6 DIT

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Questions?www.IRS.gov(Search for
Compliance Enforcement)