The Criminal Investigation Division of the IRS is responsible with carrying out tax crime investigation according to the revenue laws associated with offenses and crimes. It comprises of a large number of tax and non-tax crimes. Common crimes that the CID does an investigation include tax evasion, false statements, failure to file and forcible interference with the revenue laws.

The CID is further vested with the task to investigate money laundering crimes that are highlighted under Title 18 of the United States Code, Criminal Procedure, conspiring to defraud the US, making false statements as well as filing false claims. It can further do an investigation on Title 31, violations related to currency transactions reports, certain custom forms, and reports of foreign and financial accounts.

Given that the CID has insufficient resources, it majorly focuses on cases that involves the highest priority .This includes cases that narcotics trafficking, organized crime, public corruption and white collar crimes.  In the year 2000, the IRS focused on abusive foreign and domestic trusts. The following division usually spends its tax crime investigations on the bigger cases which carry a lot of evidence against them. Many of the little tax frauds aren’t investigated since it shall involve a lot of cash for a tax crime investigation.

The CID does an investigation of approximately 7,000 every year. Of these cases half result in recommendations for criminal prosecution. Some of these cases end up in convictions as either plea or trial. Due to the limited resources, CID attempts to focus on cases that have high deterrent value. The given policy of maximum deterrent is well pronounced in case selection, and therefore, CID normally takes cases that require a higher dollar value but need a great deterrent effect. In the recent past the CID has not only recommended prosecution of the corporate executives but also the blue collar workers.

However, in a lot of the cases the CID has looked for the substantial taxes owed, a clear duty on the part of the taxpayer to pay the taxes and relatively a straightforward case from the side of evidence and prosecution. Issues such as the health of the taxpayer do not bar the prosecution but prevent the CID in cases where the taxpayer’s poor health may spark sympathy from a jury and undermine attractiveness of cases and prosecution.

The CID will issue summons asking for your records. Some of the legally valid defense to an IRS summons include:

• Work product doctrine or attorney –client privilege

• Lack of the required records

• Impermissible church inspection

• The fifth Amendment privilege against self-incrimination and other Constitutional challenges.

Defense strategies

Whenever you are dealing with tax crime investigation, it is always good to get your help immediately. Normally the investigations are long and drawn out. The best counsel from your side is to ensure that your case is handled in the correct style from the start.

Taxpayers can request attorneys to get involved in the CID cases at virtually any level. It is something vital for the accountants and other return preparers to recognize the signs of a possible fraud referral and direct the client to a tax attorney experienced in these matters at the earliest possible stage. In a lot of the cases attorneys get advised only when the investigation is too late, that is after the taxpayer has made a confession to the special agent.

Henceforth, the best defense strategy to any CID investigations is to ensure that the taxpayer remains silent from the start of the contact. Special agents are aware of the taxpayer’s right to consult an attorney and need not to take it as an admission of guilt. Given that the CID has insufficient resources, it majorly focuses on cases that involves the highest priority.