IRS investigation rates and results

On Behalf of | Dec 2, 2018 | Firm News, White Collar Crimes

People in New York may have a particularly unique view on cases involving alleged tax evasion or other offenses related to the payment or the non-payment of federal income taxes simply because of their location. With New York being the financial heart of the country, several high-profile cases end up taking place in this area. Many of these recent cases even involve people with ties to the current federal government administration.

However, the reality is that people in any type of business or in any location may be at risk for these types of charges as the Internal Revenue Service does conduct audits which often leads to investigations despite the agency saying the primary focus of such audits is simply to collect any tax that may be due. In the 2016 fiscal year, nearly 4,400 investigations were conducted by the IRS. These investigations led to nearly 2,700 convictions with an imprisonment rate of close to 80 percent. The average time a person was ordered to spend in custody was 41 months.

The New York Times has reported, however, that the rate of investigations specific to suspected acts of tax evasion have dropped in recent years. This is due in part to budget cuts that has led the IRS to reduce staff and even close some field offices.

Other factors may well include an increased emphasis on pursuing investigations related to identity theft, Ponzi schemes, drug trafficking or other activities which may have tax implications but are not soley focused on finding ways to avoid the payment of taxes.