IRS Special Agents & Criminal Investigations
The Internal Revenue Service performs criminal investigations into individuals suspected of tax evasion, money laundering, drug trafficking, and other crimes. These investigations are conducted primarily by special agents assigned to the Criminal Investigation Division (CID). However, several sources of criminal investigation data are used by CID investigators.
A Denver tax attorney has prepared the article below to provide additional information regarding these questions and issues. Please remember this article is for informational purposes, and you should consult your tax attorney or a criminal attorney with specific questions.
Audit reports contain information about audits and assessments being performed by IRS auditors. This includes the audit date, assessment type, amount assessed, and amounts owed. Audit reports also include references to prior audit activity related to the same taxpayer.
This source contains information about taxpayers whose returns were selected for examination or collection activities. Taxpayer records include basic identifying information, including name, address, social security number, and employer identification numbers. Other information includes income earned, deductions claimed, and payments made.
Information contained in public record databases provides additional leads to investigate. Examples include motor vehicle registrations, property ownership records, birth certificates, marriage licenses, divorce decrees, etc. Public records are often referred to as “public access” because anyone can obtain copies without paying a fee.
Analysis, Review, and Investigation
A primary analysis of the facts and circumstances surrounding the case is performed. This includes reviewing the investigative file, interviewing witnesses, obtaining additional documents, etc., and analyzing those facts and circumstances to determine whether probable cause exists to believe that a violation of federal law has occurred or that there are grounds for opening a prosecution.
Relevant information is evaluated. This may include evaluating the credibility of witnesses, determining the reliability of documentary evidence, and assessing the soundness of the case against the defendant.
This preliminary process is called a “preliminary investigation.” A special agent’s front-line supervisors review the initial information and determine whether to approve or deny the further development of the case.
If the supervisor approves, approval must be obtained from the head of the office, the special agent-in-charge, to begin a “subject criminal investigation.” At least two layers of CI management must have approved initiating a subject criminal investigation. For example, the head of the office could authorize the initiation of a subject investigation based upon the recommendation of the special agent in charge.
The special agent in charge must obtain approval from their immediate supervisor to open a subject criminal investigation. In addition, the special agent in chief must sign off on the decision to open a subject investigation.
Beginning The Criminal Investigation
A criminal investigation begins once the special agent determines sufficient information to support probable cause that a crime has been committed. In some cases, the special agent must present the case to a federal prosecutor to confirm whether there is evidence to file charges against someone. If the case proceeds forward, it is referred to the IRS Office of Professional Responsibility (OPR), where a preliminary determination is made regarding whether the matter warrants further review by OPR.
In addition, the special agent submits a report to the Assistant Attorney General for the Criminal Division, recommending how the matter should proceed. At this stage, the decision about whether to prosecute rests solely with the United States Attorney’s office.
The investigation phase typically lasts several months, during which the special agent gathers evidence, conducts witness interviews, and prepares reports summarizing the findings. During this period, the special agent consults with counsel, such as the chief counsel for the Criminal Tax Division and the assistant US attorney assigned to the case.
Once the investigation concludes, the special agent presents to the grand jury, presenting the evidence gathered during the investigation. After the grand jury determines an indictment, the case moves into the pre-trial phase.
Prosecuting Tax Crimes
The IRS Criminal Investigation Division (CID), which investigates tax crimes such as filing false returns, money laundering, identity theft, and bribery, is one of several divisions within the DOJ. The division typically refers cases to federal prosecutors for possible prosecution when investigating criminal activity. The special agents assigned to investigate the case prepare a special agent report. This report includes information about the evidence collected during the investigation, witness interviews, and analysis of financial records.
If the DOJ chooses to prosecute the case, the special agent becomes part of the prosecution team. Prosecutors are in charge of preparing the case for trial. They decide what witnesses to call, how much evidence to present, and whether to offer plea deals. In addition to the prosecutor, the defense attorney represents the defendant in court. The judge presides over the proceedings and makes rulings regarding the admissibility of evidence.
Conviction Of Tax Crimes
The IRS Criminal Investigation Division recommends charges against individuals suspected of committing tax crimes. These recommendations are based on evidence obtained during an investigation. In the fiscal year 2018, approximately 3,000 criminal investigations resulted in a recommendation for prosecution. This number represents about 0.3 percent of the cases the IRS Criminal Investigations Division opened.
A conviction is a finding of guilt beyond a reasonable doubt by a jury or judge following trial. A guilty plea is a formal admission of guilt where there is no contesting of the facts.
Suppose you have been contacted by an IRS Criminal Investigator or know of an ongoing investigation in which you are a witness or target. In that case, contacting a tax or criminal tax attorney is highly recommended. Call The McGuire Law Firm at 720-833-7705.