IRS Criminal Investigation

Transcription

1 IRS Criminal Investigation Kurt Bertram Special Agent Public Information Officer November 5, 2015

2 IRS Criminal Investigation Mission Criminal Investigation serves the American public by investigating potential criminal violations of the Internal Revenue Code and related financial crimes in a manner that fosters confidence in the tax system and compliance with the law.

3 Areas of Emphasis for CI Abusive Return Preparers Abusive Tax Schemes Corporate Fraud Employment Tax Identity Theft Financial Institution Fraud Non-Filers Money Laundering Off Shore Voluntary Disclosure Questionable Refunds

4 Return Preparer Program Common Areas of Abuse Paper Tax Returns RALS/RACS Fraudulent 1040X returns Falsify tax return items for example Sch A, Sch C, EITC, HSH

5 Return Preparer Program Common Areas of Abuse continued Identity Theft including floating SSNs Refund Skimming and Theft Failure to sign returns

6 Abusive Return Preparers Buy PII from the person who stole it or from a broker. Return filer may be hard to identify. Use PII to prepare returns and control how refunds will be received

7 Abusive Return Preparer Fraud FY 2015 FY 2014 FY 2013 Case Initiations Prosecution Recommendations Indictments Convictions Conviction Rate 96.8% 96% 97.2% Sentenced Average Months to Serve

8 Abusive Return Preparers Case Examples Husband and Wife Tax Preparers Sentenced for Tax and Wire Fraud Texas Tax Return Preparers Sentenced for Tax Convictions

9 Abusive Return Preparers Case Examples Louisiana Tax Return Preparer, 12 Co- Defendants Sentenced For $10 Million Tax Fraud, Money Laundering Conspiracies Missouri Woman Sentenced For Orchestrating Tax Scheme to Obtain Free Money

10 False Form W ABC Company 123 Main Street ANY where, USA 33, , , John Q PuBLIC 456 ELM St Anyplace, Usa Figures are not typed in the same format and are not aligned Incorrect format of the Employer Identification Number (too many digits) Taxpayer name and address do not line up

11 False Form W-2 20,555 10,123 Excessive withholding in comparison to wages Information is missing

12 False Form W-2 Applied for Applied For ABC Company 123 Main Street Anywhere, USA 33, , , John Q Public 456 Elm St Anyplace, USA W-2 with visibly altered money amounts in the federal income tax box Applied For in Employer Identification Number box

13 If You Suspect Fraud: Preserve fraudulent documents so they can be produced when requested by the IRS Publication 3857 Fraudulent returns should not be filed! Contact your local IRS office or complete Form 3949-A available on the IRS website.

14 Identity Theft The FTC estimates that as many as 9 million Americans have their identities stolen each year. Stolen Identities are obtained through various methods: - Dumpster Diving - Skimming - Phishing - Theft - Data Breaches

15 Identity Theft Stolen identities are then used to file false tax returns in the names of victims The false tax returns direct refunds to: Treasury Refund Checks Bank Accounts Prepaid Debit Cards

16 Identity Theft Statistics FY 2014 FY 2013 FY 2012 Investigations Initiated Prosecution Recommendations Indictments/Informations Sentenced Percent to Prison 87.7% 80.6% 89.2% Avg. Months to Serve

17 Stolen Identity Refund Fraud (SIRF) Aiding in the fight against identity theft, the Department of Justice-Tax Division (DOJ-Tax) redefined a subset of identity theft cases, known as Stolen Identity Refund Fraud (SIRF), which specifically targets identity theft in the context of fraudulent tax refunds

18 Trends in Identity Theft Refund Schemes involving prisoner identities Stolen dependents for additional credits (EITC) Use of identity by prior year tax return preparer Use of identities of those not likely required to file a Federal tax return Data breaches payroll, healthcare, education

19 Prepaid Cards The use of prepaid cards in ID theft schemes has increased significantly. Hundreds of billions of dollars are loaded to Open-Loop prepaid cards each year. Numerous government programs employ prepaid cards to distribute benefits. Past estimates indicate such activity is in the billions each year. The prepaid cards add a level anonymity.

20 Victim Assistance Form 14039, Identity Theft Affidavit Identity Theft victims should file with the IRS Victims should attach a police report with the Form Victims should file corrected tax return ASAP

21 Victim Assistance File a complaint with the Federal Trade Commission Contact credit bureaus Publication 5027, Identity Theft Information for Taxpayers

22 Questions? Kurt Bertram Special Agent