The number of IRS prosecutions for tax-related crime has risen sharply since 2008.
A recent survey of tax crime and prosecution in the U.S. conducted by the Transactional Records Access Clearinghouse (TRAC) at Syracuse University reports that federal referrals of criminal cases by the Internal Revenue Service (IRS) have risen 38.4 percent during the Obama administration, as compared with that of his predecessor, George W. Bush. The number of criminal tax cases that have gone on to prosecution has also increased considerably, by 20.3 percent.
According to the report, annual referrals for tax crime cases during the Bush years, 2001 to 2008, were 2,529. This number rose to an average of 3,499 during the Obama administration, 2009 to 2013. The average annual number of criminal prosecutions filed by the IRS under Bush was 1,303. Under Obama, this number has been 1,568.
Additionally, the fiscal year 2013 represents a recent highpoint in federal prosecutions for tax crime with 2,010 new cases, a 30.6 percent jump over the 2012 fiscal year.
The report lists alleged fraud and attempted tax evasion as the two leading charges – 230 of the former and 200 of the latter were filed by the IRS in fiscal 2013. The justice department has also pursued numerous other charges, all on the upswing in recent years. These include the misuse of public funds, conspiracy to defraud the US government, identity-related crime, money laundering, mail fraud, and similar activities.
Responding to the data in a Reuters news report on the IRS prosecutions, TRAC co-director Susan Long noted that, in spite of ongoing budget cuts,
This is certainly reflecting a get-tough attitude [at the IRS]. (“U.S. Fighting Increase in Tax Crimes Under Obama: Watchdog.”)
An analysis of the data at accountingweb.com, however, points out that despite recent increases, IRS criminal prosecutions still fall sharply short of levels reached during the Clinton administration. The article observes that prosecutions in fiscal 2013 represent a decline of 27.4 percent over those reported for fiscal 1993, which saw 2,769 federal tax crime prosecutions.
The information obtained by TRAC was collected on a case-by-case basis and received from the government via the Freedom of Information Act (FOIA). The Act, which came into effect in 1967, allows for the disclosure of previously unreleased government information and official documents. It precludes the distribution of sensitive information related to national security, as well as information that would infringe on the privacy of individuals. The Act has been amended several times over the years, most recently with regard to electronic and intelligence information, presidential records, and with respect to certain Wall Street cases in which the revelation of information could jeopardize ongoing investigations by the Securities and Exchange Commission (SEC).
The full text and data of the TRAC survey is available here.