IRS pursuing fewer tax evasion cases: report

IRS pursuing fewer tax evasion cases: report

The IRS is pursuing fewer tax evasion cases than ever before, with its criminal division bringing almost a quarter fewer tax fraud-related crimes since 2010, according to a New York Times report.

The agency has faced numerous budget cuts since 2011, forcing it to reduce its staff by a third, but that is not the sole force behind the reduction in tax evasion cases, the Times reported.

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“Due to budget cuts, attrition and a shift in focus, there’s been a collapse in the commitment to take on tax fraud,” Chuck Pine, a former IRS official, told the Times. “I believe there are thousands of individuals who have U.S. tax obligations and are not complying with U.S. tax laws.”

IRS estimates indicate business owners avoid paying $125 billion in taxes each year that they owe, according to the Times.

The agency's tax audit process has also become less thorough, with IRS officials requesting fewer records and interviews and making fewer criminal referrals. 

"The quality of those referrals was also down," former IRS investigator Marie Allen told the Times. "That is what people popularly think we should be doing, and I’m trying to say it ain’t so."

Tax fraud was central to the crimes committed by former Trump associates Michael Cohen and Paul ManafortPaul John ManafortNew York activists go on hunger strike to advocate for ending solitary confinement New York activists go on hunger strike to advocate for ending solitary confinement House panel subpoenas Flynn, Gates MORE. Cohen last month pled guilty to to eight counts related to bank fraud, tax fraud and campaign finance law violations, while Manafort was convicted on eight charges of bank and tax fraud. 

Several sources told the Times they are concerned a decrease in IRS tax evasion cases could empower business owners to evade tax laws. 

The IRS is currently facing multiple other challenges, including the implementation of Trump's tax-cut law, budget constraints and insufficient technology.