IRS Criminal Investigations Hit 8-Year High

by Mike Godfrey, Tax-News.com, Washington

23 July 2008

A report published recently by the US Treasury Inspector General for Tax Administration (TIGTA) has found that the number of criminal investigations referred to the Justice Department by the Internal Revenue Service (IRS) grew dramatically in 2007.

This was highlighted by TIGTA in a statistical report of the Internal Revenue Service (IRS) Criminal Investigation Division's enforcement activities for fiscal years 2000 through 2007.

"This report highlights several key findings," commented J. Russell George, Treasury Inspector General for Tax Administration.

"Among those is an increase to nearly 65% of the Division's time spent on tax-related cases in 2007 - an eight-year high," he observed.

According to TIGTA, in fiscal year (FY) 2007 there were 4,600 subject investigations, up 3% over Y2006, and nearly 50% higher than in FY 2002.

George noted that one area of concern remains the growing inventory of investigations referred to the Department of Justice for prosecution and the decrease in experienced agents.

"For the first time since we began reporting on its enforcement activities, the Division had more investigations awaiting prosecution by the Department of Justice than open subject criminal investigations within the Division," he noted.

This increase has come just as the Service is facing the growing challenge of hiring more agents to replace those who are leaving.

"We believe that the continual loss of agents will negatively affect the Division's productivity in the near future," George predicted.

Due to the nature of this review, TIGTA made no recommendations. However, key Criminal Investigation officials reviewed the report prior to issuance and agreed with the facts and conclusions presented.

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