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  • Daniel Rodriguez

Year-End Report from IRS CI Illustrates Difficult Outcomes for Those Facing Criminal Tax Enforcement

Most taxpayers know that facing a tax audit or tax investigation is not an enviable position to find oneself facing. While many people are concerned about facing criminal tax consequences due to all types of mistakes and errors on their taxes, there is typically no referral to IRS CI unless there are badges of fraud present like indicia (or badges) of fraud. The presence of badges of fraud shows a likelihood that the action or inaction was taken intentionally or voluntarily despite knowledge of a legal duty or obligation. However, taxpayers who are referred to face serious consequences.

The reasons why IRS CI and prosecutors from the Department of Justice are so effective is because these individuals work as part of a multi-disciplinary team of law enforcement agents from various state and federal agencies. Special agents from IRS CI and prosecutors from the DOJ may work with agents from the FBI, DEA, US Postal Service, US Marshall Service, and the Department of Homeland Security to build cases and secure convictions. Unfortunately, for those charged with tax crimes, this arrangement is highly effective and secures convictions at a high rate.

As such, it is always better to address tax concerns before they linger and morph into violations of the tax code or even tax crimes. The experienced Sacramento tax attorneys of Newpoint Law, LLC, handle serious tax concerns and issues including tax audits and tax enforcement actions. To schedule a free and confidential tax consultation, please call us at 800-358-0305or contact us online today.

IRS CI Stats Show High Rates of Convictions & Prison Sentences

The high rates at which prosecutors secure convictions for tax crimes investigated by IRS CI illustrate how the IRS and Department of Justice investigate and prosecute tax crimes aggressively. In fiscal year 2015, the IRS launched 3,853 criminal investigations. In about 85% of investigations, IRS CI recommended the matter for prosecution. In addition, 3,208 out of a total 3,289 recommended prosecutions obtained an indictment. Convictions were given in 2,879 of the matters and in 3,092 of the criminal proceedings at least some sentence was imposed. As per IRS CI, a sentence “includes confinement to federal prison, halfway house, home detention, or some combination thereof.” Of those prosecuted, 80.8% faced a prison sentence.

Stated Focal Points of IRS CI Investigations

Each year IRS CI sets a number of investigative priorities to combat certain issues or tax frauds that are affecting the nation. In 2015, the priorities for IRS CI included:

  1. FATCA, FBAR, & Bank Secrecy Act Enforcement – International tax fraud is a major focus for IRS CI. As such, compliance with the disclosure and reporting requirements of these laws is essential. The U.S. government has entered into a number of tax and financial information-sharing agreements with more than 100 nations making many undisclosed accounts vulnerable to discovery. Initiatives like the Swiss Bank Program provide the U.S. government with additional information to discover undisclosed accounts.

  2. Voluntary Disclosure Program – Taxpayers who may have undisclosed foreign accounts or other tax problems may be able to utilize one of the IRS’s voluntary disclosure program to come back into compliance with the law. However, the different programs are appropriate for different levels of risk and should only be entered into after careful consideration of past actions and the future likelihood of criminal prosecution.

  3. Identity Theft Fraud – Identity theft fraud is a major issue in that the IRS has issued millions of dollars in payments due to false and fraudulent tax return claims. Tax refund fraud also affects individual taxpayers as they may be unable to secure their refund due to a previous fraudulent filing in their name.

IRS CI focuses significant resources on these and other enforcement priorities. Additional enforcement priorities by IRS CI include the Fraud Referral Program, Political/Public Corruption, Organized Crime Drug Enforcement Task Force, and Bank Secrecy Act & Suspicious Activity Report.

Our Sacramento Tax Lawyers Handle Serious Tax Concerns

The experienced and dedicated Sacramento offshore accounts and trusts disclosure lawyers of Newpoint Law Group can help taxpayers address concerns like undisclosed foreign accounts or mistakes on a tax return before they become major problems. To schedule a free and confidential tax consultation, call us at 800-358-0305 today.

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