TIGTA: Lack of Staff, Funding Has Decreased Criminal Investigation Activity

Chris Gaetano
Published Date:
Sep 19, 2017

The Treasury Inspector General for Tax Administration (TIGTA) said that, over the years, that reductions in staffing and funding have led to a decrease in the number and size of criminal investigation field offices in the U.S., which in turn has led to a decline in the number of cases initiated and completed. The report noted that, between 2012 and 2016 the IRS Criminal Investigations budget has shrunk from $593 million to $576 million. This has been accompanied by a net loss of 522 IRS special agents in the same time period. This loss has meant that the IRS has less capacity to investigate potential criminal matters: between 2012 and 2016, the number of investigations initiated dropped from 5,125 to 3,395, and the number of cases completed dropped from 4,937 to 3,721.

It noted, however, that while the trends in overall criminal investigation case initiations and completions declined, the current staff of field special agents maintained consistent inventory levels (the service tries to have agents working an average of five cases each). It also pointed out that, because of increased focus in this area, international cases resulting in sentencing improved approximately 33 percent from FY 2012.

On the other hand, TIGTA said that employment tax fraud cases have dropped at the same time: between 2012 and 2016, case initiation in this area has declined 7.4 percent, prosecution recommendation has declined 10.5 percent, incarceration has declined 10.9 percent, and average months to serve has declined 41.7 percent. One area of improvement in this area, though, was actual sentencing, which increased by 10.1 percent. 

Fraud cases have seen declines as well. From 2012 to 2016, the number of fraud referrals received dropped by 44.3 percent, the case acceptance rate has dropped 0.5 percent, prosecution recommendations have dropped 34.6 percent, U.S. Attorney's Office acceptance rates have declined 1.4 percent, convictions have dropped 12.7 percent, and incarceration has dropped 3.5 percent. 

Bank Secrecy Act cases have also dropped, according to TIGTA. The service has completed 37.3 percent fewer investigations and made 39.8 percent fewer prosecution recommendations. However, the cases the service does take to court are more likely to result in sentencing, increasing by 31.3 percent in the same time period. 

Given the nature of the report, TIGTA made no recommendations to the IRS. 

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