Tax Fraud ‘Epidemic’ Spurs Rare Law Enforcement Cooperation

The Internal Revenue Service is the first to admit that it has a major problem on its hands when it comes to fighting tax fraud. This past summer, the acting head of the IRS said as much to members of Congress.

As evidence, the agency touts that it more than tripled the number of criminal investigations into alleged identity theft in fiscal year 2012. As a result of those efforts the agency claims it prevented the payout of $20 billion in fraudulent refunds.

The IRS Criminal Investigation Department is credited with initiating more than 5,300 tax crime investigations in the last fiscal year. Not all of those charged with tax crimes ended up being convicted, which would seem to reinforce why anyone facing such investigations should enlist the help of experienced legal counsel. Still, nearly 3,900 convictions were obtained.

Perhaps one of the more intriguing statistics associated with the investigations is that about a third of them centered in the southeastern U.S. The Treasury Department says Florida tends to be the hottest of hotbeds for such probes, followed by Georgia.

The reason for that, officials say, is a combination of factors. There are a lot of older Americans in the region, many who are not using their Social Security numbers any more. At the same time, this population sees doctors more often, and police say it’s easy for thieves to get Social Security numbers from doctors’ offices.

The prevalence of identity theft in the region has led to an unusual level of coordination among law enforcement agencies. In just the Tampa area there’s an alliance made up of members from 20 different local, state and federal agencies working together.

Officials note that it can take months to put together a case because their focus is not simply on the low-level players. They say tax fraud organizations tend to large and sophisticated, and that getting to the root suspects requires a great deal of evidence.

In short, officials explain that it takes patience to prosecute a tax fraud case. And we would offer that it takes an equal amount of patience and aggressive advocacy in protection of the rights of those who might be accused., “Somebody’s Watching Me: IRS Criminal Investigations Ramp Up Efforts To Thwart Tax ID Thefts,” Kelly Phillips Erb, Oct. 28, 2013

Tags: Blog, Tax Crimes