The Internal Revenue Service has an intimidating reputation. Each year, hundreds of millions of Americans scramble to get their tax returns filed on time for April 15, and everyone worries about receiving that dreaded IRS audit notice in the mail. Most taxpayers have little to worry about, but for the unfortunate defendants who do come under investigation, the consequences can be harsh. So just how worried should you be? How often does the IRS actually recommend criminal prosecution to the Department of Justice? And what sorts of white collar crimes does the IRS investigate?
Unsurprisingly, the IRS keeps meticulous records, including public records of its own criminal enforcement data. Statistics from the Criminal Investigation division, known simply as CI, are broken down by type of tax crime, total number of investigations initiated, total number of cases that were recommended to the Department of Justice (DOJ) for prosecution, total number of indictments and informations, the number of sentences imposed, the average length of convicted offenders’ prison terms, and the overall incarceration rate for the offense.
If you’re a regular reader of our blog, you may remember our previous article discussing the IRS’ criminal prosecution statistics for money laundering. In the interest of avoiding redundancy, we’ll be leaving money laundering out of this batch of statistics.
The statistics provided below refer to the 2014 fiscal year.
Think these numbers sound a little lower than you expected? That’s only because abusive tax schemes, bankruptcy fraud, and corporate fraud happen to be less common than most of the other offenses the IRS investigates – as much of the following data attests.
By looking at all of this data as a whole, you can identify some overall trends – and unfortunately, they don’t bode well for taxpayers who stand accused of criminal activity.
For instance, the very “lowest” incarceration rate (corporate fraud) was still comparatively high at about 72%, meaning nearly three in four defendants were sentenced to prison. Meanwhile, the “shortest” average sentence (employment tax evasion) was still fairly long at nearly one and a half years. For some offenses – such as drug crimes, healthcare fraud, employment tax evasion, and insurance fraud – 100% (or close to 100%) of the IRS’ prosecution recommendations resulted in the defendant receiving a sentence.
Here’s how the superlatives broke down by offense:
If you’ve been charged with tax crimes in Philadelphia or elsewhere in Pennsylvania, you could be facing incredibly harsh penalties. Many financial offenses have the potential to be prosecuted as federal crimes, which are frequently subject to lengthier prison terms and higher fines than their state-level counterparts.
If you are under investigation for tax crimes by the IRS, it is of critical importance that you seek experienced legal representation immediately. To arrange for a free and completely confidential consultation, call the law offices of Krasner & Long right away at (215) 882-9752.