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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