IRS Report Shows Increased Enforcement Actions

One of my contacts sent me an article titled: “SOS for the IRS” and asked the following questions:

Will the IRS’ budget cuts mean fewer crackdowns on delinquent taxpayers?
Does that mean there won’t be enough demand for tax debt resolution professionals?

The following is my answer:

Not so fast!

What the article doesn’t mention is that the IRS is relying heavily on technology to catch tax debtors.  In 2012 alone the IRS sent out some 200 million pieces of correspondence to taxpayers.  Additionally, people shouldn’t be lulled into a false sense of security if they read too much into this.  Just because customer service at the IRS stinks (40% or 20 million calls last year weren’t answered by IRS representatives, as one example) doesn’t mean you get a free pass and the IRS forgets about you.  Delinquent taxpayer's day of reckoning may be a delayed by a few months, but’s it’s coming!  People under audit or who owe money to the IRS lest not forget they are still guilty until proven innocent and it is your responsibility to handle the situation.

Practitioners, now more than ever, need to fuel up their marketing machines to take on these tax resolution cases.  There are still 25 million people who need our help.

Just today, I read the following IRS Annual Report which states in part, for fiscal year 2013, significant increases in enforcement actions against tax criminals and a robust rise in convictions, including identity theft.  I don’t think this sounds like the IRS is taking their foot off the gas, do you?  They may be a little behind in the administrative (non-criminal) arena but are going gang busters with putting people away!

IRS Annual Report Reveals Increased Criminal Enforcement

The IRS Criminal Investigation (CI) investigates potential criminal violations of the Internal Revenue Code and related financial crimes in a manner to foster confidence in the tax system and compliance with the law.

Key points of fiscal year report 2013 include:

  • A 12.5 percent increase in investigations initiated compared to the prior year.
  • A nearly 18 percent gain in prosecution recommendations.
  • CI initiated 5,314 cases and recommended 4,364 cases for prosecution.

Note: These increases were accomplished at a time when agent resources decreased more than 5 percent.

Meanwhile, convictions rose more than 25 percent compared to the prior year. The conviction rate for fiscal 2013 was 93 percent.

According to Richard Weber, Chief of Criminal Investigation, the conviction rate is especially important because it reflects the quality of their teamwork with law enforcement partners and the U.S. Attorneys’ Offices.

Criminal Investigation Continues its Fight against Identity Theft

CI initiated over 1,400 investigations and recommended prosecution of over 1,250 individuals who were involved in identity theft crimes during fiscal 2013.

CI is an active partner in over 35 Identity Theft Task Forces, working side-by-side with federal, state and local law-enforcement agencies to combat this insidious crime that undermines the United States tax system and cause immeasurable hardship to innocent victims.

Additionally, the 36-page report summarizes a wide variety of IRS CI activity on a range of tax crimes including money laundering, public corruption, terrorist financing and narcotics trafficking financial crimes during the fiscal year ending Sept. 30, 2013.

Weber states that these cases individuals and corporations from all segments of society, including corporate board rooms, offices of public officials, tax preparation businesses, identity theft gangs and narcotics trafficking organizations.

People Facing the IRS Wrath Need a Tax Resolution Professional

The IRS may fail at answering its phones, and get budget cut to the bone but one thing is for sure, they will continue to go after taxpayers with tax troubles. Those who owe back taxes or are under audit (and there are millions) will need a tax resolution professional to help them get back into compliance and resolve their tax issues.

Keep learning here with me on my blog an on my website to learn how to add tax resolution work to your business or how to elevate the number of case leads to help more people and super charge your profits!

Article information: “SOS for the IRS” via On Point by Tom Ashbrook: