IRS Criminal Investigation

Overview

Internal Revenue Service, Criminal Investigation (IRS-CI) is the United States federal law enforcement agency responsible for investigating potential criminal violations of the U.S. Internal Revenue Code and related financial crimes, such as money laundering, currency transaction violations, tax-related identity theft fraud and terrorist financing that adversely affect tax administration. While other federal agencies also have investigative jurisdiction for money laundering and some Bank Secrecy Act violations, IRS-CI is the only federal agency that can investigate potential criminal violations of the Internal Revenue Code, in a manner intended to foster confidence in the tax system and deter violations of tax law. Criminal Investigation is a division of the Internal Revenue Service, which in turn is a bureau within the United States Department of the Treasury. According to information on the IRS web site, the conviction rate for federal tax prosecutions has never fallen below 90 percent. The IRS asserts that their conviction rate is among the highest and that it is a record that is unmatched in federal law enforcement. According to the 2019 annual report, 1500 investigations were initiated by IRS-CI, with 942 prosecutions recommended and 848 sentenced. IRS-CI is a founding member of the Joint Chiefs of Global Tax Enforcement, a global joint operational group formed in mid-2018 to combat transnational tax crime. IRS-CI is also a member agency of the Organized Crime Drug Enforcement Task Force, a federal drug enforcement program concerned with the disruption of major drug trafficking operations and related crimes, such as money laundering, tax and weapon violations and violent crime.

History

On July 1, 1919, the Commissioner of Internal Revenue, Daniel C. Roper created the Intelligence Unit to investigate widespread allegations of tax fraud. To establish the Intelligence Unit, six United States Post Office Inspectors were transferred to the Bureau of Internal Revenue to become the first special agents of the organization that would one day become Criminal Investigation. Among the first six, Elmer Lincoln Irey was designated as the Chief of the new unit. Hugh McQuillan, Arthur A. Nichols, Frank Frayser, Everett Partridge and Herbert E. Lucas were the other five that made up the new unit. On October 6, 1919, Irey brought in William H. Woolf from the Office of the Chief Postal Inspector in Washington as his Assistant Chief. They formed the nucleus that became the Intelligence Unit. The Intelligence Unit quickly became renowned for the financial investigative skill of its special agents. It attained national prominence in the 1930s for the conviction of public enemy number one, Al Capone, for income tax evasion, and its role in solving the Lindbergh kidnapping. From these promising beginnings the Intelligence Unit expanded over the intervening decades, investigating tax evasion by ordinary citizens, prominent businesspersons, government officials, and notorious criminals. Unofficially, the agents in the Intelligence Unit were known as "T-Men" due to their affiliation with the United States Department of the Treasury. In July 1978, the Intelligence Unit changed its name to Criminal Investigation (CI). Over the years CI's statutory jurisdiction expanded to include money laundering and currency violations in addition to its traditional role in investigating tax violations. However, Criminal Investigation's core mission remains unchanged. It continues to fulfill the important role of helping to ensure the integrity and fairness of the United States tax system. In July 2019, IRS-CI celebrated their 100th anniversary. The agency celebrated the occasion with planned events in distinct IRS-CI Field Offices nationwide including Washington D.C., San Francisco, Las Vegas, and Chicago.

Agency executive

IRS-CI is headed by the Chief, Criminal Investigation appointed by the IRS Commissioner. The Chief reports to the Chief Executive Officer and is responsible for the full range of planning, managing, directing, and executing the worldwide activities of CI. The current Chief is Jarod Koopman, who oversees a worldwide staff of approximately 3,300 CI employees, including approximately 2,200 special agents who investigate and assist in the prosecution of criminal tax, money laundering, public corruption, cyber, ID theft, narcotics, terrorist-financing and Bank Secrecy Act related crime cases.

Field offices

IRS-CI operates 18 field offices in the United States located in Atlanta, Boston, Charlotte, Chicago, Dallas, Denver, Detroit, Florida, Houston, Los Angeles, Newark, New York, Oakland, Philadelphia, Phoenix, Seattle, St. Louis, and Washington D.C. (IRS-CI headquarters). Many of these offices are further subdivided into smaller resident agencies which have jurisdiction over a specific area. These resident agencies are considered to be part of the primary field offices. The IRS-CI headquarters, located in Washington, D.C., controls the flow of the agents and support staff that work out of the field offices across the country. Each field office is overseen by a Special Agent in Charge (SAC) and assisted by one (or more) Assistant Special Agent in Charge. In addition to the field offices in the United States, IRS-CI, through its Office of International Operations (IO), has special agent attachés stationed in 13 foreign countries:

Australia Barbados Canada Colombia Germany Hong Kong Mexico Netherlands (Europol) Panama Singapore The Bahamas United Arab Emirates United Kingdom

Organizational structure

Office of the Chief Commissioner's Protection Detail Office of Communication Advanced Analytics and Innovation Applied Analytics Data Management & Governance Innovation Nationally Coordinated Investigations Unit Refund Fraud and Investigative Support Systems and Operational Support Cyber and Forensic Services Center for Science and Design Cybercrimes Digital Forensics Field Operations Northern Area Field Operations Southern Area Field Operations Western Area Field Operations Global Operations Asset Recovery and Investigative Services Financial Crimes Global Operations Policy & Support International Field Operations and International Liaison and Strategy Narcotics and National Security Section Special Investigative Techniques Strategy Asset and Knowledge Management Assurance and Advisory Finance Human Resources National Criminal Investigation Training Academy Project Office Workforce Development Technology Operations Development Field Operations

Rank structure

The following is a listing of the rank structure found within IRS-CI (in ascending order):

Field Agents New Agent Trainee (NAT) Special Agent (SA) Supervisory Special Agent (SSA) Assistant Special Agent-in-Charge (ASAC) Special Agent-in-Charge (SAC) Management Directors Advanced Analytics and Innovation Cyber and Forensic Services Field Operations Global Operations Strategy Technology Operations Deputy Chief of Staff Chief of Staff Deputy Chief Chief

Special agents

IRS-CI Special Agents (GS-1811 Job Series) are commonly called criminal investigators. Special agent training begins with the Special Agent Basic Training Program (SABT) at the Federal Law Enforcement Academy (FLETC) in Glynco, Georgia. New special agents attend approximately six months of formal training followed by 1-4 years of on-the-job training including:

Special agents must satisfactorily complete the SAIT to retain employment with IRS-CI.

Authority

IRS-CI Special Agents are trained to execute arrest and search warrants and conduct authorized undercover operations, including technical surveillance. Consistent with the safe conduct of such operations, special agents are trained in building-entry and non-lethal defensive tactics training, in harmony with current Federal law enforcement use-of-force training. Special agents also serve as dignitary protection staff and in air marshal roles.

Investigation categories

The Criminal Investigation strategic plan is composed of four interdependent programs:

Legal Source Tax Crimes Illegal Source Financial Crimes Narcotics Related Financial Crimes Counterterrorism Financing These four programs are mutually supportive, and encourage utilization of all statutes within CI's jurisdiction, the grand jury process, and enforcement techniques to combat tax, money laundering and currency crime violations. Criminal Investigation must investigate and assist in the prosecution of those significant financial investigations that will generate the maximum deterrent effect, enhance voluntary compliance, and promote public confidence in the tax system.

Legal source tax crimes

Investigating Legal Source Tax Crimes is IRS-CI's primary resource commitment. Legal Source Tax investigations involve taxpayers in legal industries and occupations who earned income legally but chose to evade taxes by violating tax laws, such as not reporting stock buy backs.

Illegal source financial crimes

The Illegal Source Financial Crimes Program attempts to detect all tax and tax-related violations, as well as money laundering and currency violations. This program recognizes that money gained through illegal sources is part of the "untaxed underground economy" that threatens the voluntary tax compliance system and undermines public confidence in the tax system.

Narcotics-related financial crimes

The Narcotics-Related Financial Crimes Program was established in 1919, and is one of IRS-CI's oldest initiatives. Its goal is to utilize the financial investigative expertise of its special agents to disrupt and dismantle major drug and money laundering organizations. IRS-CI's role in supporting narcotics related investigations was highlighted in the 1996 book, The Phoenix Solution: Getting Serious About Winning the Drug War, by Vincent T. Bugliosi.