How Does the IRS Decide Who to Prosecute?

Posted on April 05, 2016

The IRS Criminal Investigation Division is responsible for determining whether a taxpayer should be criminally prosecuted.

The IRS Criminal Investigation Division makes a recommendation to the United States Department of Justice as to whether a taxpayer should be criminally prosecuted for tax crimes. In 2015, the IRS Criminal Investigation Division had a conviction rate of over 90 percent.

More recently, the decision whether to prosecute a taxpayer depends, in part, on whether the taxpayer will receive a jail sentence. If the IRS convicts taxpayers, and nobody goes to jail, then there is no true deterrent for being prosecuted for tax crimes.

The IRS is attempting to obtain convictions and jail sentences to publicize and, hopefully, prevent other taxpayers from trying the same behavior. The IRS is also interested in encouraging voluntary tax compliance.

This new focus stems, in part, from the recent conviction of Ty Warner, where the Beanie Baby billionaire received a criminal tax conviction but did not go to jail, instead receiving a sentence of probation and community service. As a result, the IRS is now attempting to choose cases that will result in jail time.

Have you filed a tax return that is not truthful? Do you have unfiled tax returns? Both of these are criminal tax offenses and can result in jail time in Illinois and many other states.