In the last post, we outlined some of the organizational aspects of the IRS that can affect taxpayers. In particular, we discussed the role of auditors with regard to tax audits. As we noted, that role is significantly different from the one played by collection officers.
In this post, we will look at another key category of employee within the IRS, namely the special agents who are responsible for criminal investigations.
These agents we work in the Criminal Investigation (CI) division of the IRS. The CI's duties do not only include looking into possible criminal violations of the tax code. The CI is also responsible for investigating activity that may fall under certain federal laws concerning money laundering, as well as transactions covered by the Bank Secrecy Act.
In short, the CI's duties cover a broad scope, and its agents draw upon multiple sources in determining when to begin an investigation.
Sometimes the source is an auditor (revenue agent) or collections officer within the IRS. For example, if a revenue agent conducting an audit comes to suspect tax fraud, it would be up to a special agent at the CI to investigate further.
But the CI does not rely solely on information from within the agency in determining whether to begin an investigation. The CI also receives information from the general public, as well as various law enforcement agencies and federal prosecutors throughout the nation.
In an upcoming post, we will discuss in more detail how the CI gathers and assesses information in order to make a preliminary determination about whether a crime may have been committed. For purposes of this post, we will merely note that eventually the special agent and the supervisor of that agent must make a decision about whether to discontinue the investigation or proceed with further steps that could lead to a recommendation for criminal prosecution.
There are numerous levels of review within the CI before a prosecution recommendation is actually made. If a case makes it through those levels of review, it gets referred either to the Tax Division of the U.S. Justice Department or, for non-tax investigations, to the applicable U.S. Attorney's office.
Any time the CI is involved, the importance of getting advice and counsel from an experienced tax attorney becomes particularly acute. It is especially crucial, in such cases, to get counsel sooner rather than later - before criminal charges are actually filed.