April 01, 1998
Criminal Investigation - an Overview
The Criminal Investigation (CI) Division of the Internal
Revenue Service enforces the criminal statutes on tax administration and related financial
The CI function employs approximately 3,200 special agents to
work the roughly 5,000 cases initiated each year. In fiscal year 1997, the conviction rate
for cases adjudicated was 93 percent. A special agent is a federal criminal investigator
whose specialty is financial investigations. The special agent's training includes both
accounting and federal law enforcement procedures.
IRS financial investigations follow federal guidelines in
evidence gathering. Like other agencies, the IRS may need to use such law enforcement
methods as search warrants. The investigation concludes with a written report detailing
findings of violations of the law.
Financial investigations also have several unique
- Their major goal is to identify and document each financial
transaction during the course of a crime.
- By their nature, they are very record intensive.
- They take long periods of time to locate and document the
movement of money and other financial transactions.
- They require analysis of records such as bank account
information and real estate files.
Prior to recommending prosecution, the written report requires
- CI Centralized Review Unit
- CI Group Manager
- CI Branch Chief
- CI Division Chief
- IRS District Counsel (tax investigations only)
- Department of Justice Tax Division (tax investigations only)
- The United States Attorney
The IRS has one of the highest conviction rates in federal law
enforcement. In Fiscal Year 1997, the IRS had the following conviction statistics:
Category Court Actions Convictions Conviction Rate
Fraud 2,292 2,160 94 percent
Narcotics 1,056 950 90 percent
Total 3,348 3,110 93 percent
Investigations initiated in one year may be recommended for
prosecution the following year, while court actions may occur in the third. Convictions
may result in substantial prison sentences, as well as payment of fines, civil taxes and
CI's Primary Programs
The Fraud Program focuses on a broad range of illegal activity
designed to defraud individuals, businesses or governments, involving such things as tax
evasion, bankruptcy, financial institutions, health care, insurance, and excise taxes. In
Fiscal Year 1997, IRS CI initiated 3,718 cases under the Fraud Program and obtained 2,160
In the Narcotics Program, CI uses its financial expertise to
investigate the country's drug and drug money laundering organizations. In 1981, the
President established the Organized Crime Drug Enforcement Task Force (OCDETF), which is a
unique combination of federal, state and local law enforcement agencies working together
to fight drugs and organized crime in America. IRS CI has participated in nearly 63% of
all OCDETF cases since 1983. In Fiscal Year 1997, CI obtained 950 OCDETF convictions.
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