IRS Criminal Investigation Division 2016 Annual Report

October 23, 2017

More news on the IRS budget cut front. From 2013 to 2016, criminal investigations that the IRS initiated dropped 36%, from 5,314 to 3,395. The number of criminal investigation (CI) agents has dropped by 13% over the same period. The high water mark for the number of CI agents was 1995, when the Service employed 3,363. Now there are 2,217. What kind of cases did CI focus on in 2016? Here are the Investigative Priorities:

1. Abusive Return Preparer Fraud

2. Abusive Tax Scheme Fraud

3. Employment Tax Fraud

4. Fraud Referral Program

5. Identity Theft Fraud

6. International Tax Fraud

7. Political/Public Corruption

8. Questionable Refund Fraud

Under the category of General Tax Fraud, the Report states that general tax fraud investigations directly influence the public’s tax compliance and are the backbone of CI’s enforcement program. Certain schemes were identified in the report:

1. Skimming by deliberately underreporting or omitting income

2. Maintaining dual sets of books

3. Creating false entries in books and records

4. Claiming personal expenses as business expenses

5. The use of false deductions or credits to decrease taxes

6. Hidden or transferred assets for the purpose of avoiding the payment of taxes