IRS Criminal Investigation Findings

April 10, 2015

The Internal Revenue Service released its 2014 IRS Criminal Investigation Division annual report earlier this week. It focuses on international tax fraud, tax return preparer fraud, questionable refund fraud, identity theft, public corruption, bank secrecy act violations, significant money laundering investigations and terrorist financing cases,

The report shows that the IRS Criminal Investigation Division opened 4,297 cases in FY 2014. IRS Criminal Investigation Division Chief Richard Weber said the IRS “maintained a steady focus on what is important. Our highest priority is to enforce our country’s tax laws and support tax administration to ensure compliance with the law and combat fraud.”

As the only federal law enforcement agency with jurisdiction over federal tax crimes, the IRS Criminal Investigation Division boasted a 93.4% conviction rate in 2014, the highest conviction rate in all of federal law enforcement. The Criminal Investigation Division is routinely called upon by prosecutors across the country to be the lead financial investigative agency on a wide variety of financial crimes including international tax evasion, identity theft and transnational organized crime.

The IRS Criminal Investigation Division investigates potential criminal violations of the Internal Revenue Code and related financial crimes. The 2014 annual report summarizes a wide variety of IRS Criminal Investigation activity throughout the year and includes summaries on a range of tax crimes, money laundering, public corruption, terrorist financing and narcotics trafficking financial crimes.

Two of the biggest stories of the year — Credit Suisse and Bank Leumi — are included in the report. In the largest criminal tax case ever filed, Credit Suisse pleaded guilty to conspiracy to aid and assist U.S. taxpayers in filing false income tax returns and agreed to pay a total of $2.6 billion.

Following the Credit Suisse investigation, Criminal Investigation led the case against Bank Leumi Group, a major Israeli international bank that admitted conspiring to aid and assist U.S. taxpayers to prepare and present false tax returns. The unprecedented agreement marks the first time an Israeli bank admitted to such criminal conduct. Under the terms of the agreement, Bank Leumi Group will pay the U.S. a total of $270 million and cease to provide banking and investment services for all accounts held or beneficially owned by U.S. taxpayers.

The annual report, though, also showed that all is not all roses for the IRS Criminal Investigation Division. In the the past five years, Weber noted, Criminal Investigations’s staff has been reduced approximately 11 percent, bringing staffing down to 1970’s levels.

If you are the subject of an IRS Criminal Investigation, contact an experienced New York tax attorney at Mackay, Caswell & Callahan, P.C. today. With over 30 years’ of tax experience and offices throughout New York State, we can offer experienced tax help.

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