The IRS initiated 1,714 investigations into individuals and groups who knowingly participated in illegal domestic and offshore tax schemes in fiscal year 2018, recommending prosecutions in a vast majority of tax crime cases, according to the agency’s criminal investigation report for fiscal year 2018.
However, the agency is facing a shortage of agents, according to the report, all while financial crime has proliferated over the past few years and cybercrime looms large.
The fiscal year saw 1,050 prosecutions with 1,052 individuals sentenced, reflecting the agency’s overall high conviction rate.
These schemes include the creation of partnerships, trusts or foreign companies to falsely make it appear a foreign entity owns the assets, according to the IRS.
Overall, IRS’ Criminal Investigation Unit (CI) had a conviction rate of 91.7% and identified almost $9.7 billion in tax fraud, according to the report published this week.
(Related: Top 10 Least Tax-Friendly States in US: 2018)
CI leadership said it was spending more investigative time in the area of international tax compliance and enforcement.
“Most of our cases ultimately end in convictions and jail time,” IRS CI Chief Don Fort stated in the report.
CI is also beginning to use data analytics, as well, to fight tax crime and has launched its Nationally Coordinated Investigations Unit (NCIU), which will become an official CI section in the new year.
So far, the nascent unit, which employs data analytics, has referred more than 50 leads to CI field offices, a number that is expected to balloon in the current 2019 fiscal year.