The number of investigators on staff with the Criminal Investigation unit at the Internal Revenue Service may soon fall to 1970s staffing levels. The unit investigates financial crimes from tax fraud to identity theft and counter-terrorism and often assists federal prosecutors when money issues are involved in complex cases.
One high profile investigation that the division worked on recently was the probe into tax evasion at Credit Suisse that resulted in a $2.5 billion fine.
Reuters reports that the number of special agents will decline to 2,130 by fiscal year 2016. Attrition, often from retirements, account for the projected 13 percent decline from this year. The agency received approval to hire 48 agents in 2014, but still will have a shortfall.
The division chief, Richard Weber, has a goal of getting back to 3,000 agents. At the agency peak in 1995, it employed 3,358 investigators. However, as the agency budget shrinks that goal becomes more distant.
Because of the sequester last year, the IRS lost $600 million from its budget. This year many agencies returned to pre-sequester budgets, but not the IRS. Last month, the U.S. House of Representative approved of a measure to cut the enforcement budget by another $1 billion in 2015. A proposal at the Senate increases the budget $31.6 million, but still falls below the agency request.
With fewer agents, the IRS cannot investigate as many cases. It also can lead to delays in the cases that it does take. The agency may also hold out for stiffer penalties in these cases, thus it is important to seek representation from a tax attorney during any pending criminal tax investigation.
Source: Reuters, "Exclusive: IRS enforcement agent numbers could drop to lowest levels since 1970s," Nadia Damouni, August 25, 2014.