Criminal prosecutions by the Internal Revenue Service (IRS) were up 30.6% in fiscal year 2013 over the same period in 2012. The criminal prosecute rates were released in a report by Transactional Records Access Clearinghouse (TRAC) and are based on information received through the Freedom of Information Act.
In a comparison of IRS data from FY 2009-2013 and FY 2001-2008, the average number of cases referred by the IRS to the Justice Department for prosecution rose 38.4%. While the number of cases referred increased, the percentage of cases the Justice Department prosecuted remained the same at 53%.
Of the reported 2,010 new prosecutions in 2013, the most common charges were #1 Fraud and False Statements and #2 Attempt to Evade or Defeat Tax. These two categories have been numbers 1 and 2 over the past several decades. The #3 charge was Public Money, Property or Records, which is a sharp increase over the last several decades. This is due to the government’s focus on targeting identity theft.
It is interesting to note that the number of new prosecutions was up even though the IRS staffing levels have decreased. Will this upward trend continue in FY2014 even with the IRS budget cuts?
Please note that this was originally published on the Boston Tax Attorney Blog.