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Treasury Inspector General for Tax Administration

Press Release

April 27, 2010
TIGTA - 2010-15
Contact: Karen Kraushaar
(202) 622-6500

IRS's Criminal Investigation Division Needs A Better Strategy For Managing Cases It Refers For Prosecution, TIGTA Finds

WASHINGTON - The Internal Revenue Service (IRS) needs to improve the way it manages the criminal tax investigations it refers to the Justice Department for prosecution, the Treasury Inspector General for Tax Administration said in a report publicly released today.

At the request of the IRS's Criminal Investigation Division (CI Division), TIGTA evaluated the steady increase beginning in 2003 in the number of criminal tax cases pending in the prosecution pipeline at the Justice Department and the impact this had on the CI Division's resources. The Justice Department relies on CI Division special agents to remain involved with cases that are referred for prosecution. This involvement includes collecting additional information, interviewing and preparing witnesses to testify, and assisting in court procedures.

TIGTA confirmed steady growth in the number of criminal cases in the prosecution pipeline, rising from 2,733 in 2002 to 3,915 in 2009. The CI Division believes that the prosecution pipeline's increase began when the Justice Department shifted its operational priorities to focus on national security issues.

CI Division and Justice Department officials interviewed by TIGTA described long-standing challenges that exist in the working relationship between the two organizations. These include, in part:

"While criminal tax cases must sometimes compete for attention against cases involving other high-profile felony charges and national security issues, their value in deterring criminal tax fraud is significant," said J. Russell George, the Treasury Inspector General for Tax Administration. "Our review found that the Criminal Investigation Division can do its part to bring such matters to trial by adopting practices that will permit more strategic management of its caseload inventory," he said, adding, "a sharper focus is important because the Administration and Congress see cracking down on tax evasion as a way to reduce the tax gap."

TIGTA recommended that the IRS create a structured oversight system to monitor and more effectively manage the prosecution pipeline process, create a strategic management team to develop innovative policies and procedures to ensure tax cases receive appropriate attention and resolution by the Department of Justice, develop additional techniques that refine the prosecution pipeline performance measures, and ensure that the IRS Commissioner receives necessary information to have a clear depiction of the investigative resources devoted to prosecution pipeline inventory actions.

The IRS said it would examine the creation of a structured oversight and coordination system to monitor and more effectively manage the prosecution pipeline process, create a strategic team to examine ways to improve its pipeline inventory management system, and disagreed with the remaining recommendations.


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