The line between tax auditors policing mere civil infractions and investigators pursuing serious tax crimes is beginning to blur in the latest reorganization at the top of the Internal Revenue Service. Jarod Koopman, a long-time and well-known criminal investigator, assumed the role of Chief Compliance Officer in October 2025, and, under the most recent shake-up, will also oversee the IRS’s Criminal Investigation division.
This consolidation places both civil and criminal enforcement under the operational leadership of a single individual for the first time in modern history.
At a structural level, this development raises a fundamental institutional question, namely, whether combining civil and criminal authority risks impairing the fair and effective administration of both systems.
Understanding the impact of this shakeup requires some background on how civil and criminal tax enforcement have traditionally operated, and why their separation has mattered. It also means looking at the IRS’s earlier efforts to strengthen civil fraud enforcement without expanding criminal authority—most notably through the Office of Fraud Enforcement—and considering why the current leadership structure raises legitimate concerns about institutional drift.
Civil vs. Criminal: How the Systems Normally Work
The Civil Enforcement Framework
Most IRS enforcement occurs in the civil arena, not because most taxpayers are compliant, but because most noncompliance is not criminal.
Civil examinations are designed to answer one fundamental question: Did the taxpayer report the correct amount of tax? The tools the auditor uses to answer that question include information requests, interviews and document reviews. The taxpayer’s burden of proof is relatively low.
Civil agents are trained to identify errors, inconsistencies and technical noncompliance. They are not trained to build criminal cases or to develop evidence of intent to evade tax.
The consequences of civil noncompliance can be significant. Taxpayers may face additional tax assessments, interest, delinquency penalties, accuracy-related penalties and, in serious cases, civil fraud penalties. But the system remains bounded. Civil enforcement does not result in incarceration, criminal records or loss of liberty. It is designed to collect revenue and correct behavior, not to punish.
The Criminal Enforcement Framework
IRS Criminal Investigation (IRS-CI) is the law enforcement arm of the IRS, which employs special agents tasked with investigating criminal violations of U.S. tax laws. A criminal tax investigation is initiated after an agent develops predication, or indications that a crime may have been committed.
A major difference between a civil and criminal inquiry by the IRS is the burden of proof. In a civil examination, the burden of proof falls on the taxpayer to show why disputed items on the tax return are accurate. In a criminal investigation, however, the burden of proof is the responsibility of the government.
To prove criminal intent, IRS special agents utilize law enforcement powers such as issuing subpoenas for records, conducting surveillance, interviewing witnesses and, in some instances, executing search warrants.
If an agent develops evidence to indicate a crime was committed, the agent works closely with the U.S. Department of Justice to charge the individual with one or more crimes in federal district court. The ramifications for being charged criminally for federal tax violations are extensive, and include potential incarceration, criminal and civil fines, interest, penalties and being ordered to repay the tax evaded.
While no interaction with the IRS is pleasant, the consequences of a criminal probe are far-reaching and can be devastating for an individual and their family.
The Office of Fraud Enforcement: A Civil Solution to a Civil Problem
While the IRS has long recognized that civil audits cannot be used as covert criminal investigations, it has also come to recognize a growing gap in its ability to identify and address increasingly sophisticated and evolving tax fraud schemes within the civil system.
In response, the IRS created the Office of Fraud Enforcement (OFE) in 2020, a centralized civil unit designed to strengthen fraud identification and development across all operating divisions. OFE was placed squarely on the civil side of the house, not within IRS-CI.
OFE’s mission is to provide technical fraud expertise to civil examiners, to standardize fraud development practices and improve the use of civil fraud penalties, and to ensure that potential criminal referrals are better vetted before escalation.
OFE was explicitly designed as a buffer, not as a bridge. It reflects an institutional understanding that most fraud exists in a gray zone–serious enough to warrant enhanced civil penalties, but not necessarily criminal.
Despite OFE’s creation, the fundamental legal constraints remain. Once a case begins to resemble criminal conduct, civil agents must suspend development of the case and defer to IRS-CI.OFE was not intended to change that architecture. The strategy was to deepen civil capability without collapsing the civil–criminal boundary.
Why the Integrated Leadership Model Raises Concern
The IRS traditionally maintained strict separation between its civil and criminal operations, due to legal and practical reasons. Practically, not all taxpayers understand the difference between the civil and criminal sides of the IRS, so procedures exist to assist with making the distinction. For instance, in criminal administrative (not grand jury) investigations, when interviewing the subject of the investigation, special agents are required to inform subjects of their constitutional rights. The agents in IRS-CI are the only federal agents required to perform this task.
Legally, U.S. v. Tweel (5thCir.) governs certain behavior during civil and criminal inquiries. Specifically, it precludes special agents from directing civil employees to perform activities to further a criminal investigation. As it relates to criminal referrals from civil to IRS-CI, Tweel can apply if the civil agent continues a civil examination after indications of fraud are developed.
The consolidation of civil and criminal enforcement under the operational leadership of one individual may prove problematic with any deviation from established legal or policy requirements and raises concerns about whether the restructuring will change the tone of civil audits, and even potentially put taxpayer constitutional rights in jeopardy.
Contact Us
If you have questions about this leadership shake-up or concerns about how IRS enforcement practices may affect your tax situation reach out to Withum’s Tax Controversy Services Team.
