Don't Mess With Taxes

Elmer Irey headed the Internal Revenue Bureau's Intelligence Unit in the 1930s. It was under Irey's direction that evidence was gathered leading to the conviction of Al Capone for failure to pay his income tax. Read more about Irey and Capone at The Mob Museum.

I'm a big sports fan. But sometimes I need a break. So in my channel flipping today to find something other than the Olympics, soccer/futbol, NHL hockey and part 1 of NASCAR's 83-step Daytona 500 qualifying process, I ran across one of my favorite movies, "The Untouchables."

I'm talking the 2007 version, with Kevin Costner as Eliot Ness and the incomparable Sean Connery doing James Bond in the guise of a street-wise Chicago police officer.

I love this flick for many reasons, one of which is, of course, it's about how tax evasion led to the capture of Al Capone (played in this film by Robert DeNiro).

That fun tax fact also earned the movie a mention in an old piece I did on the money messages in movies.

And the movie, on the heels of yesterday's post on the Internal Revenue Service's new effort to go after those using cryptocurrency to escape taxes, got me thinking about the agency's wide range of law enforcement activities.

Special tax investigators: The IRS' Criminal Investigation (CI) division's annual report provides a good overview of what these T-for-Treasury men accomplished in fiscal year 2017.

Sticking with the bitcoin focus, I looked at the other specialized IRS CI units already in place. There were three last year. Here's a brief look at what they do and did last year.

The Global Illicit Financial Team (GIFT) task force, led by IRS CI, investigates organizations involved in the illegal movement of money used to support international crime organizations. Since its creation in 2010, GIFT has initiated over 80 cases and seized assets valued at over $4.4 billion. Recently, GIFT resolved a global foreign bribery case that produced a total penalty of more than $965 million against a Swedish-based firm and its subsidiary in Uzbekistan.

The Alcohol and Tobacco Tax and Trade Bureau (TTB) is described in CI's annual report as the reunion of Eliot Ness and Elmer Irey's T-Men. Irey, in case you're not a vintage lawman follower, was director of the IRS' lead investigative unit during Capone's federal tax evasion prosecution. TTB's partnership between the IRS' criminal investigators and what used to known as the ATF (for alcohol, tobacco and firearms; explosives was added later) began in 2003. Since then, TTB has initiated more than 139 investigations into illicit tobacco and alcohol transactions.

The Swiss Bank Program was started in 2013. IRC CI special agents in Washington, D.C., working with attorneys from the Department of Justice, have been instrumental in getting 80 Switzerland-based banks to cooperate in tracking assets hidden from the IRS. The banks' non-prosecution agreements have resulted in collection of more than $1.3 billion in penalties. In addition, 58 potential tax evasion leads have been sent to CI field offices for further investigation and more than 18,000 leads that did not meet criminal criteria have been forwarded to the IRS for civil tax compliance action.

Success for CI: Overall, IRS CI last fiscal year boasted a conviction rate rivaling all federal law enforcement at 91.5 percent while working tax cases in more than 72 percent of the division's time.

That conviction rate speaks to the thoroughness of the investigations, noted CI chief Don Fort. That's why, he added, "CI agents are routinely called upon by prosecutors across the country to lead financial investigations on a wide variety of financial crimes including international tax evasion, identity theft, terrorist financing and transnational organized crime."

And all that work is being done, said Fort, with the same number of special agents — around 2,200 — as the IRS had 50 years ago.

That's pretty amazing, which is why those 2,200 CI staffers earn not only my kudos, but also recognition as this week's By the Numbers honorees.

"Financial crime has not diminished during that time; in fact, it has proliferated in the age of the Internet, international financial crimes and virtual currency," added Fort. "Despite these challenges, we continue to do amazing work, investigating some of the most complicated cases in the agency's history. Criminals would be foolish to mistake declining resources for a lack of commitment in this area."

I know the IRS got in trouble a few years ago for some of its in-house videos, but with all of today's streaming options and viewers' love of quasi-reality programming, I'm thinking that it could be time to not only rewatch the 2007 Untouchables movie, but yet again revive the television show.

You also might find these items of interest:

• Doing time for tax crimes
• Taxes, not Tommy guns, to fight crime 
• Follow the criminal tax money at Las Vegas' Mob Museum