According to recent data, the Internal Revenue Service (IRS) investigated 3,395 cases for tax crimes in 2016, 2,019 in 2017 and 2,886 in 2018. Based on these numbers, it may appear that the agency is moving away from criminal tax enforcement. To believe this is a new trend that may reduce the risk of an audit is not only wrong, but a potentially dangerous assumption.

Numbers don’t lie — or do they?

Although the data is accurate, it is deceiving. Yes, it appears the agency is moving forward with fewer investigations. However, the IRS states that is simply choosing to move forward more efficiently.

How is the IRS being more efficient?

The IRS has stated it is using applied analytics and additional resources to better ensure investigations are successful at “thwarting emerging threats.” As explained by the agency’s Deputy Chief of the Criminal Investigation Division, the IRS is working to better use data to find and solve the best financial crime cases.

Why is it dangerous to believe the agency is reducing efforts to enforce tax crimes?

Because the agency is not decreasing these efforts, it is focusing in on cases that are more likely to move forward in their favor. As a result, those who receive notice of an impending investigation are wise to take the process seriously. Tax crimes can result in serious legal ramifications, including large financial penalties and potential imprisonment. The attorneys at Goldburd McCone are familiar with this process. We can review various legal strategies to better ensure your rights are protected.