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IRS Criminal Probes up 12.5% in 2013


Identity theft-related cases helped fuel the growth in the number of enforcement actions, a federal report shows.

By University Alliance on August 18, 2014
Tax Return Scams on the Rise

The Internal Revenue Service reported a 12.5% rise in enforcement actions despite a 5% drop in the number of special agents during fiscal year 2013, according to the IRS Criminal Investigation Annual Report.

The agency’s Criminal Investigation (CI) division initiated 5,314 cases in 2013 and recommended 4,364 cases for prosecution, according to the report. During that same period, there were nearly 3,900 indictments issued and more than 3,300 convictions secured. The number of convictions increased more than 25% over fiscal year 2012.

“Our special agents and analysts continue to prove that tenacity and hard work in investigating financial crimes are the keys to successful prosecutions,” Chief of Criminal Investigation Richard Weber wrote in the February 2014 report.

The rise in the number of cases and convictions largely was driven by the proliferation of identity theft cases. CI initiated nearly 1,500 identity theft cases in 2013 compared with just 898 in 2012 and 276 in 2011.

According to a February report in The Wall Street Journal, the increase in identity theft cases stems from a steep rise in the number of perpetrators attempting to file tax returns using stolen identity information.

The IRS’ annual report noted that CI special agents helped halt the release of 1.3 million fraudulent tax returns totaling more than $7 billion in refunds in the previous fiscal year.

Recent cases have highlighted the scale of scams involving false tax returns. In March 2014, a Georgia man was sentenced to about a year in federal prison for filing false tax returns using the stolen identities of more than 10 people. Among the victims: U.S. Attorney General Eric Holder, the nation’s top law enforcement official.

Holder’s name, Social Security number and date of birth were among the data used to file one of the false returns, the Federal Bureau of Investigation (FBI) reported.

According to prosecutors, Yafait Tadesse and co-defendant Eyaso Abebe obtained personal information about Holder and other victims from websites that sell such information. The fraudulently obtained tax refunds were sent to Tadesse’s address in Carrollton, Ga., in the form of prepaid debit cards. A surveillance video showed Tadesse using one of the cards at local stores, authorities said.

Tadesse also was sentenced to three years of probation and ordered to pay the IRS more than $4,000 in restitution. Abebe has pleaded guilty to the theft of government funds and is scheduled to be sentenced in August 2014, according to the FBI.

In addition to identity theft-related offenses, Criminal Investigation’s approximately 2,500 special agents worked a variety of other cases in fiscal year 2013, including public corruption, terrorist financing and money laundering. Assets totaling more than $980 million were seized or forfeited, according to the annual report.

Category: 2014 Headlines