Are You or Your Business a Possible Target for IRS CI in 2022?

During its 2021 fiscal year, Internal Revenue Service Criminal Investigation (IRS CI) initiated more than 2,500 investigations resulting in approximately 1,250 sentencings. IRS CI increased its staffing during FY 2021, and it undertook various initiatives to increase its footprint in the U.S. and abroad. So, are you (or is your business) a possible target for IRS CI in 2022? In this article, US International Tax Advisors shares some key insights for U.S. taxpayers heading into the new year.

Top IRS CI Enforcement Priorities in 2021

IRS CI recently released its FY 2021 Annual Report. The report highlights some of the division’s top enforcement priorities during FY 2021—which are also likely to remain top enforcement priorities in 2022:

• Cryptocurrency-Related Fraud – While cryptocurrency has presented enforcement challenges for IRS CI in the past, the division seized $3.5 billion in cryptocurrency assets during FY 2021. This accounted for 93 percent of the division’s total seizures. With new tools at its disposal, IRS CI is planning to aggressively target cryptocurrency-related tax fraud in 2022.
• High-Income Taxpayer Fraud – IRS CI also placed particular emphasis on targeting high-income taxpayers in 2021. The FY 2021 Annual Report notes that IRS CI uses a variety of methods to identify and investigate business owners, executives, investors and others suspected of underreporting or underpaying their federal income tax liability.
• Pandemic-Related Fraud – Fraud targeting the Paycheck Protection Program (PPP), Economic Injury Disaster Loan (EIDL) program and unemployment insurance (UI) programs has been a major issue since the start of the pandemic. IRS CI prioritized COVID-19 fraud enforcement in 2021, and it will almost certainly continue to target individuals and entities suspected of defrauding these programs in 2020 and 2021 heading into 2022.
• Cross-Border Tax Crimes – International tax violations are another long-standing enforcement priority for IRS CI. This includes violations such as failing to report overseas income and failure to disclose foreign financial assets as required under the Bank Secrecy Act and FATCA.
• General Tax Fraud and Tax Evasion – Nearly three-quarters of all IRS CI investigations in 2021 focused on general tax fraud and tax evasion. This includes everything from underreporting income and employment tax liability to fraudulently obtaining federal refunds.

What Are Your Options if You Have Concerns Heading Into 2022?

As we head into 2022, what should you do if you have concerns about your past federal tax filings (or lack thereof)? Depending on your individual circumstances, you may have a variety of options available. For example, you may be eligible for a settlement agreement or offer in compromise (OIC), or you may qualify to submit a voluntary disclosure under the IRS' Streamlined Filing Compliance Procedures or IRS CI’s Voluntary Disclosure Program. In any case, you need to make informed decisions – and you need to act before IRS CI launches an investigation if possible – so it is strongly in your best interests to speak with a Maryland tax attorney as soon as possible.

Request an Appointment with US International Tax Advisors

If you have concerns about federal tax compliance, we encourage you to get in touch. To speak with US International Tax Advisors, in confidence, call 844-796-8565 or request an appointment online today.