IRS-CI Releases Annual Report On Conviction Rate & Tax Fraud Enforcement Actions

The criminal investigation branch of the IRS, IRS-CI, released a report last Thursday detailing their actions and successes from the fiscal year that began October 1, 2021, and ended September 30, 2022. Among their accomplishments, the IRS-CI holds its position as the sixth largest federal law enforcement agency and the only federal law enforcement agency that dedicates 100% of its time and resources to financial investigations, as well as being the only agency with the authority to investigate violations of the Internal Revenue Code.

In the 2022 fiscal year, the IRS-CI investigated some of its largest tax crimes to date, locating more than $31 billion in tax fraud and related financial crimes. The agency seized record amounts of cryptocurrency through their investigations and initiated multiple initiatives intended to strengthen partnerships in both the public and private sectors.

IRS-CI Remains Preeminent Law Enforcement Agency Across the Globe

The cases that IRS-CI investigates include national and international crime, which means that maintaining partnerships around the world is integral to their success. In the 2022 fiscal year, IRS-CI dedicated itself to initiating and expanding these partnerships with foreign counterparts. Special agents led training in multiple countries, including Argentina, Germany, and Colombia, with topics ranging from cybercrime to human trafficking.

After changes to the Mexican law, IRS-CI Mexico City was able to launch a new initiative that led to the apprehension of 8 criminal fugitives along with the identification of nearly 80 more.

In partnership with Taskforce Kleptocapture and the Chiefs of Global Tax Enforcement, IRS-CI worked to identify and target Russian sanction evaders while simultaneously locating sanctioned assets. Nearly 50 individuals and entities were identified for potential enforcement action as a result of these efforts.

IRS-CI Continues to Emphasize Cybercrime and Money Laundering

The IRS-CI has made no secret of its focus on cybercrime, which includes cryptocurrency schemes and money laundering. IRS-CI chief Jim Lee indicated that their special agents are identifying criminal activity in the dark web and metaverse with a very high conviction rate. This included a lawful seizure of over 94,000 Bitcoin valued at $3.6 billion, which is the largest seizure in U.S. history.

IRS-CI Maintains a High Conviction Rate

As a whole, the IRS-CI accomplished a 90.6% conviction rate on cases that were accepted for prosecution. The agency initiated 2,550 investigations in the fiscal year. According to IRS-CI chief Jim Lee, “Tax and other financial crimes know no borders. If you violate the law and end up in the crosshairs of an IRS-CI special agent, you are likely going to jail.”

The report highlights the increasing enforcement arm of the IRS, warning taxpayers in the U.S. and across the world of the importance of accurate tax filings. With its growing responsibility for conducting financial crime investigations, the IRS-CI spends approximately 70% of its resources on tax fraud, with the remaining personnel and resources initiating investigations into money laundering, identity theft, healthcare fraud, narcotics and human trafficking, and other related financial crimes. Its agents hold sole investigative jurisdiction over Internal Revenue Code violations, with operations conducted from their 20 U.S. field offices and the support of 12 international attaché posts.

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