I retired only a few weeks ago after 25 years as a special agent with IRS Criminal Investigation, and have lost count of the number of texts I received containing news stories about IRS-CI special agents being assigned to conduct immigration enforcement. This, along with reports of reduced funding and staffing, make this an opportune time to remind US taxpayers of the critical work performed by the agency—and is why many professionals with IRS-CI experience see these proposals as shortsighted and unnecessary.
IRS-CI is the law enforcement arm of the IRS tasked with investigating violations of income tax, money laundering, and Bank Secrecy Act laws. It’s the only federal agency that dedicates 100% of investigative time to financial investigations and has sole authority to investigate violations of US income tax laws.
Due to the specialized nature of the work, agents must meet strict hiring standards, which include educational requirements such as accounting courses. IRS-CI agents have a distinguished history of significant financial investigations—Al Capone and Swiss banks to name a few—and of “following the money,” which earned them the reputation as some of the world’s best financial investigators. Like Liam Neeson’s line in the movie “Taken,” IRS-CI agents “have a very particular set of skills.”
As individuals and businesses start to collect documents and prepare returns during this tax season, it’s important to remember that the US tax system is built on the concept of voluntary compliance, which calls on taxpayers to accurately report all income and pay their taxes. To ensure compliance, taxpayers must trust that the system is fair and equitable and noncompliant taxpayers are held accountable.
In its role of administering the tax laws, the IRS must maintain a robust enforcement program to ensure compliance with the laws and deter noncompliance. IRS-CI is a critical component, as criminal enforcement efforts focus on the most egregious cases that enable the IRS to publicize crimes and deter others from breaking the law.
It’s not widely known that IRS-CI agents, in addition to investigating cases only involving tax crimes, often partner with other agencies investigating a variety of criminal violations—corruption, narcotics, immigration fraud, cryptocurrency, terrorism, identity theft—and the largest criminal enterprises—Mexican drug cartels, Chinese money laundering syndicates, dark web markets, and transnational criminal organizations.
Agents are assigned to a variety of task forces such as the Organized Crime Drug Enforcement Task Force, High Intensity Drug Trafficking Areas, and Joint Terrorism Task Force. IRS-CI agents involved in these investigations add value by performing detailed financial analyses to trace the movement of criminally derived funds. The financial investigative work is invaluable to successful outcomes in complex cases and demonstrates to a jury how the criminal enterprise financially benefited from the crime.
One distinction between task force assignments and being deputized—as is currently being discussed—is the supervision and assignment of duties. Agents assigned to task forces are there specifically to lend their financial expertise as part of a larger investigative effort, but IRS-CI management continues to direct and supervise their work.
Alternatively, news reports suggest that the Department of Homeland Security is seeking to deputize IRS-CI agents to assist with immigration enforcement efforts. This distinction is critical. Should IRS-CI agents be deputized as is being requested, there is a good possibility their work will be directed by management within DHS and IRS-CI will lose supervisory control. This scenario is a slippery slope in which the suggested role to assist DHS can quickly transition from conducting financial investigative work to simply being “warm bodies” to be deployed by DHS.
Finally, the proposal to deputize IRS-CI agents and reassign them from ongoing critical tax compliance work is completely unnecessary because, like the task force work, IRS-CI already partners with agents from DHS on immigration investigations. The DHS letter to Treasury Secretary Scott Bessent indicates several justifications, one being that IRS personnel will be tasked to investigate businesses suspected of paying undocumented workers—a cash payroll scheme.
The IRS can already assist with such investigations without being deputized if there is evidence that an income tax case was warranted. Additionally, all criminal tax cases require predication and go through multiple levels of review and approval prior to initiation, and deputizing agents won’t enable DHS to circumvent these statutory requirements. Thus, deputizing IRS agents is unnecessary.
I partnered with DHS on an investigation of an immigration attorney who orchestrated a massive scheme to obtain green cards on behalf of clients in exchange for exorbitant cash fees. We successfully delivered on this complex, multi-year investigative effort by leveraging our respective expertise—the DHS agent investigating the immigration fraud, and my tracing of cash deposits into multiple personal and business bank accounts to show tax evasion—which we presented during a federal jury trial to obtain a conviction. I can think of no scenario where my being deputized by DHS would have improved the results of this investigation.
Many who truly understand the value of the IRS-CI believe that the leadership at the Treasury and IRS should keep IRS-CI special agents focused on mission-critical work and allow them to continue to “follow the money.”
Reproduced with permission. Published February 21, 2025. Copyright 2025, Bloomberg Industry Group 800-372-1033. For further use please visit Bloomberg Copyright and Usage Guidelines.
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