The Internal Revenue Service's (IRS) Criminal Investigation Division
investigates tax fraud and helps other law enforcement agencies to
investigate financial crimes, such as money laundering, linked to
narcotics trafficking. In the early 1990s, IRS raised questions about
the Division's investigative priorities because they increasingly
involved nontax investigations that supported national drug and crime
policies--even as the tax gap grew to $128 billion for 1992. This
concern prompted the Division to devote more resources to tax
investigations. This report discusses the steps that the Division has
taken since the early 1990s to increase the time spent on tax
investigations versus nontax investigations. It also highlights the
investigations initiated by the Division, as well as referrals to U.S.
Attorneys for prosecution and court sentences on the basis of these
investigations, for fiscal years 1990 through 1996.
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