“A deterrent effect” and a signal “that fraud will not be tolerated.”
Such are the words employed by the Internal Revenue Service on an agency website page chronicling the objectives of the department’s Criminal Investigation Division (most often delineated by the shorthand acronym CI) and prosecutions that proceed from its efforts.
What exactly is CI, and when does it come into play?
As the IRS notes, CI investigations focus upon the alleged criminal activity of individuals who commit acts that contravene the requirements set forth in the Internal Revenue Code and select other statutes.
An investigation conducted by a CI special agent must proceed through various stages and review levels en route to a formal prosecution and potential criminal conviction. A primary investigation is first conducted, which, if deemed to have merit, might conceivably turn into a so-called “subject criminal investigation.” In some instances, a CI matter might ultimately be passed along to the U.S. Department of Justice or the United States Attorney for prosecution. The IRS states the above-cited deterrent effect on illegal taxpayer activity is realized through about 3,000 criminal prosecutions annually.
Unquestionably, CI agents have considerable leeway in conducting interviews, carrying out surveillance activities, obtaining warrants to search and so forth.
This bears noting, though: The IRS is not a government agency with plenary powers, and its employees must carry out their duties with full respect for applicable laws and the limits that are legally imposed upon them.
We note the restrictions on IRS power on our tax law website at the San Francisco Bay area Law Offices of Connie Yi, PC, noting therein the erroneous assumption held by many people that “the IRS has been granted authority to act above the law.”
That is flatly not the case; indeed, the agency must always act lawfully and, when it does not, can find itself in state or federal court as a defendant.
Although our law firm certainly grants the agency the respect it merits, we don’t fear it or recognize its ability to act in unlawful ways. As our site states, the IRS is “subject to the laws of the land,” and that is the standard we hold it to when safeguarding the rights of our clients and fully promoting their legal interests when they are challenged by the agency.