Budget pressures at the Internal Revenue Service’s Criminal Investigation Division are cutting the number of investigators there to the lowest level in four decades, and officials say the changes are forcing the division to scale back its fight of financial crime.
It will also hurt government coffers, they add, since IRS probes can bring in hefty fines.
The division investigates a variety of financial misconduct, from tax fraud and money laundering to identity theft, narcotics and counter-terrorism. Federal prosecutors around the country often seek help for cases involving money issues.
Recent high-profile investigations include probes into tax evasion by Credit Suisse Group AG (CSGN.VX) and Sudan, Cuba and Iran sanctions violations by BNP Paribas (BNPP.PA), which resulted in settlements of $2.5 billion and $9 billion, respectively. IRS Criminal Investigation has also been involved in public corruption cases such as the conviction of Jesse Jackson Jr., a former U.S. Representative and the son of civil rights leader Reverend Jesse Jackson Sr., for misusing campaign funds.
“The reason they are so important is because of the tax angle,” said Ronald Machen Jr., the U.S. Attorney for the District of Columbia, adding that he wished there were more agents. “When you are looking at individuals who steal money, they are always going to want to claim less on their taxes than they have in their various bank accounts.”
