April 2003

IRS Criminal Investigations Double in 2002 Over Previous Year

The Internal Revenue Service more than doubled its criminal investigations in 2002 compared to the previous fiscal year, the Service reported last month.

The number of investigations for 2002 went up to 254, compared to 116 in fiscal year 2001. The Department of Justice also referred more cases to the IRS in 2002: 89, compared to 73 the year before.

The upward trend in referrals carried over to the first quarter of 2003, the IRS reported, with 28 cases involving accountants, compared to 12 cases in the same period last year. There were significant increases in investigations involving electronic return originators and return preparers as well.

“We are seeing more and more activity involving unscrupulous tax preparers,” David Palmer, chief of IRS Criminal Investigation, said, according to an agency press release. “We urge taxpayers to take some simple steps to avoid being snared by a person selling bad tax advice.”