TIGTA: IRS Criminal Investigation Division Needs More Resources to Fight Identity Theft

Chris Gaetano
Published Date:
Sep 3, 2019

The Treasury Inspector General for Tax Administration (TIGTA) said in a recent report that the IRS Criminal Investigation Division should be playing a bigger role in fighting identity theft but has instead allocated most of its resources to more traditional tax crimes. 

TIGTA noted that, between 2013 and 2017, the number of identity theft investigations initiated by the IRS Criminal Investigation (CI) Division declined by 75 percent, while the number of special agents on such cases declined by 15 percent. While the total number of cases initiated has declined too, the 75 percent figure is still great compared to the percentage decline of the total number, which was 43 percent. Meanwhile, the TIGTA report itself was drafted in response to an announcement in the division's 2018 annual report that it plans to further shift resources away from identity theft in favor of traditional tax work and bringing the most sophisticated tax cases to the U.S. Department of Justice for prosecution.

Part of this decline was attributed to the division simply not knowing about many cases: TIGTA pointed out that, in 2016 alone, 98,773 taxpayer-initiated identity theft referrals were not placed in the Scheme Tracking Referral System (STARS) for later consideration. 

"CI’s coordination and documentation of internal identity theft referrals needs improvement," said the TIGTA report. "It is every Federal employee’s duty to report fraud to the proper authorities. Given that requirement, the proper authorities should have an effective process to receive referrals. Other functions inside the IRS that interact with identity theft victims have useful information about identity theft and refund fraud. If CI took steps to harness an effective partnership with other IRS functions, CI could increase the quality and quantity of its investigations. While there is a CI referral process for compliance functions, there is no referral process for other employees who work with identity theft cases such as the Taxpayer Advocate Service [TAS] and the Wage and Investment (W&I) Division’s Identity Theft Victims Assistance organization (IDTVA)."

While the IRS Criminal Investigation Division agreed that it needs to assess the process by which cases are referred via STARS, it disagreed with TIGTA's recommendation to develop a process with the TAS and the W&I Division to submit referrals to the division.

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