The cruelest month: IRS doesn't mess around in April

The cruelest month: IRS doesn't mess around in April
Fraud prosecutions remind the public of the agency's enforcement muscle.
APR 05, 2015
If it feels like you're seeing an inordinate number of stories about criminal tax prosecutions lately, expect to read even more soon. IRS prosecutions spike in April, possibly as a not-so-gentle reminder during filing season that there can be a big price to pay for tax evasion and tax fraud. A data analysis by the Transactional Records Access Clearinghouse at Syracuse University shows that in April the number of criminal prosecutions coming from IRS investigations is consistently significantly higher than it is in January. The director of the TRAC Research Center, Susan Long, said the pattern isn't coincidence. It's also not because the IRS just found juicy cases to refer to prosecutors from the current tax season — the lead time is way longer than that. "Back in 1973, we got IRS manuals, and they actually talked about coordinating [prosecutions] during tax season to make people think about their responsibility under the tax law," Ms. Long said. The IRS did not respond to a request for comment. When prosecutors decide to pursue a case based on an IRS investigation, they can levy a number of criminal charges in one case: money laundering, mail fraud, bank fraud and so on. But they have to choose one violation from the laundry list as the "lead charge" in their case. (More: IRS chief says Affordable Care Act not a problem for taxpayers) "Fraud and false statements" is the most common choice. Next up: "conspiracy to defraud the Government claims." Those cases are up 37% over the past year, and over the past five years they're up almost tenfold. Feeling worried now about cutting any corners with your taxes? Messing with the tax man is never a good idea, but fewer than 2% of Americans are investigated for tax fraud, according to Nolo.com, the publisher of legal self-help books. If they are, the odds of getting hit with a civil fine or criminal charge is around 20%.

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