Sam Brotman, JD, LLM, MBA November 8, 2013 5 min read

IRS Criminal Investigations Division

Introduction to the IRS Criminal Investigations Division

The IRS Criminal Investigation Division is responsible for handling tax cases that are the subject of fraud and misinterpretation of the law. According to the IRS, “Criminal Investigation (CI) serves the American public by investigating potential criminal violations of the Internal Revenue Code and related financial crimes in a manner that fosters confidence in the tax system and compliance with the law.” [1] The IRS Criminal Investigations Divisions examines potential criminal activity that is specifically related to tax crimes and makes recommendations for prosecution to the United States Department of Justice – Tax Division. As an example, tax fraud cases are typically referred to the IRS Criminal Investigation Division.

When the IRS criminal investigation starts an investigation, there is a little chance that the taxpayer will know about it right away. The IRS Criminal Investigations Division and their special agents work quietly to gather evidence before making a presence known on a case. They typically start by examining the taxpayer and their behavior and sometimes will participate in undercover operations to spy on a taxpayer’s activity. In addition, they can do what it called a mail cover, where they will get copies of a taxpayer’s mail. The purpose of a mail cover would be to try and get copies of statements from any bank or brokerage accounts that the taxpayer did not report. The IRS Criminal Investigations Division can perform these investigations while a civil audit or IRS collections matter is going on, which is referred to as a parallel investigation. In fact, your IRS civil auditor may be gathering information to pass along to the IRS Criminal Investigations Division.

Although other federal agencies house investigative divisions for money laundering and bank secrecy act violations, the Internal Revenue Service is the only agency that can investigate criminal violations of the Internal Revenue Code (IRC). The IRS Criminal Investigations Division is often brought in on other cases to perform joint agency investigations. Within the IRS Criminal Investigations Division, there are four separate programs that are assigned to tackle different types of tax crimes and criminal activity. These are:

  • Legal Source Tax Crimes
  • Illegal Source Financial Crimes
  • Narcotics Related Financial Crimes
  • Counterterrorism Financing

These four programs of the division are mutually supportive and all encourage balanced utilization of statutes that specifically fall under the division. The programs also support the grand jury process and effective enforcement techniques that help to combat tax evasion with respect to money laundering and currency crime. Criminal Investigation investigates those cases that will enhance compliance and promote public confidence in the U.S. tax system.

The involvement of the IRS Criminal Investigations Division is something that should be taken very seriously by taxpayers. If you are contacted by a special agent or have reason to believe that you are under investigation, you should not hesitate to consult the services of a qualified criminal tax defense attorney to assist you in this matter. If you have further questions regarding the content of this article, or if I can further assist you, please contact me using the contact information contained on this website.

[1] See: “Criminal Enforcement,” 4/25/2013.

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