IRS Criminal Investigation Kurt Bertram Special Agent Public Information Officer November 5, 2015
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.
Areas of Emphasis for CI • Abusive Return • Financial Institution Preparers Fraud • Non-Filers • Abusive Tax • Money Laundering Schemes • Off Shore Voluntary • Corporate Fraud Disclosure • Employment Tax • Questionable • Identity Theft Refunds
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
Return Preparer Program Common Areas of Abuse continued… Identity Theft – including “floating” SSNs Refund Skimming and Theft Failure to sign returns
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
Abusive Return Preparer Fraud FY 2015 FY 2014 FY 2013 Case Initiations 266 305 309 Prosecution 238 261 281 Recommendations Indictments 224 230 234 Convictions 210 193 207 Conviction Rate 96.8% 96% 97.2% Sentenced 204 183 186 Average Months to 27 28 27 Serve
Abusive Return Preparers Case Examples Husband and Wife Tax Preparers Sentenced for Tax and Wire Fraud Texas Tax Return Preparers Sentenced for Tax Convictions
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”
False Form W-2 123-45-6789 33,965.27 01-32566-0001 33,965.27 9,362.87 ABC Company 123 Main Street 00 ANY where, USA 67.29 0.00 0.00 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
False Form W-2 20,555 10,123 • Excessive withholding in comparison to wages • Information is missing
False Form W-2 Applied for 123-45-6789 1 9,362.87 Applied For 33,965.27 33,965.27 67.29 ABC Company 123 Main Street 00 Anywhere, USA 00 John Q Public 456 Elm St Anyplace, USA 11111 • W-2 with visibly altered money amounts in the federal income tax box • “Applied For” in Employer Identification Number box
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.
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
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
Identity Theft Statistics FY 2014 FY 2013 FY 2012 Investigations Initiated 1063 1492 898 Prosecution Recommendations 970 1257 544 Indictments/Informations 896 1050 494 Sentenced 748 438 223 Percent to Prison 87.7% 80.6% 89.2% Avg. Months to Serve 43 38 48
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
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
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.
Victim Assistance • Form 14039, Identity Theft Affidavit – Identity Theft victims should file with the IRS – Victims should attach a police report with the Form 14039 – Victims should file corrected tax return ASAP
Victim Assistance • File a complaint with the Federal Trade Commission www.identitytheft.gov • Contact credit bureaus - www.Equifax.com - www.Experian.com - www.TransUnion.com • Publication 5027, Identity Theft Information for Taxpayers www.irs.gov
Questions? Kurt Bertram Special Agent 816-591-6094 kurt.bertram@ci.irs.gov
Recommend
More recommend
