Fiscal Year 2020 was a very busy—and productive—year for the IRS’ Criminal Investigations unit. The just-released annual report for CI Division touts the unit’s identification of more than $10 billion in tax fraud and other financial crimes, despite the limitations of the COVID-19 pandemic.
This made IRS Commissioner Chuck Rettig a very happy man.
“The special agents and professional staff who make up Criminal Investigation continue to perform at an incredibly high-level year after year,” said Commissioner Rettig. “Even in the face of a global pandemic, the CI workforce initiated nearly 1,600 investigations and identified $2.3 billion in tax fraud schemes. This is no small feat during a challenging year, and their work is critical to protecting taxpayers and the integrity of our tax system.”
IRS investigators had plenty of work to keep them busy in 2020, examining COVID-19-related fraud, cybercrimes, virtual and cryptocurrencies, traditional tax investigations, international tax enforcement, employment tax, refund fraud and tax-related identity theft.
The IRS is changing tactics to keep up with perpetrators.
In response to COVID-19-related cases, CI special agents adapted their investigative techniques to initiate cases into fraudulent claims for Economic Impact Payments, Paycheck Protection Program loans, and refundable payroll tax credits from the Coronavirus Aid, Relief, and Economic Security Act (also known as the CARES Act).
“This year, more than any in recent memory, demonstrated the extraordinary agility and adaptability of the CI workforce,” said Jim Lee, Chief of CI. “Clearly, unscrupulous individuals sought to exploit the economic safeguards put in place to buttress a nation in crisis. These individuals and groups were instead met with a cadre of special agents determined to thwart their efforts.”
It should be noted that Lee took over the reins of CI just this year, after the retiring Don Fort, named Lee the new chief, capping his long career in the division.
In fiscal year 2020, CI initiated 1,598 cases, devoting 73% of its time to tax-related investigations. The number of CI special agents increased by just one percent; new special agents were hired to offset planned retirements.
CI increased and improved its data analyses while strengthening its international partnerships to assist in finding the most impactful cases.
One important partnership remained the Joint Chiefs of Global Tax Enforcement (J5), a trans-national committee comprised of tax organizations from five countries. In FY 2020 alone, more information was shared on cryptocurrency, tax crimes and related enforcement, than in the previous 10 years combined. CI also saw the first guilty pleas for a case brought to justice under the J5 umbrella.
CI is the only federal law enforcement agency with jurisdiction over federal tax crimes. As such, the division has one of the highest conviction rates in federal law enforcement: 90.4%.
IRS leadership says the high conviction rate is a testament to the department’s thoroughness of CI investigations and the quality of its special agents. CI is routinely called upon by prosecutors and partner agencies across the U.S. to lead financial investigations on a wide variety of financial crimes.
“While the annual report is an excellent summation of the hard work and dedication exhibited by CI, this year’s report takes on special significance,” Lee said. “This report unequivocally reflects the efforts of a workforce undaunted by unprecedented personal and professional challenges. I am profoundly grateful to serve with the men and women of CI.”
The interactive 2020 report summarizes a variety of CI activities during the fiscal year and highlights examples of cases for each field office on a wide range of financial crimes. The fiscal year begins Oct. 1 and ends on Sept. 30.
Patricia Parrilla Tax Services