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July 20, 2010
TIGTA - 2010-36
Karen Kraushaar
karen.kraushaar@tigta.treas.gov
TIGTA-PAO@tigta.treas.gov
(202) 622-6500

TIGTA Finds Drop in Asset Seizures by the IRS's CI Division

WASHINGTON - The number of assets seized by the Internal Revenue Service's Criminal Investigation Division (CI Division) fell in 2009 and 2008, according to a report publicly released today by the Treasury Inspector General for Tax Administration (TIGTA).

TIGTA evaluated whether the CI Division adequately considered the seizure of assets during its illegal source and narcotics investigations. The CI Division uses its asset seizure and forfeiture authority to combat financial crimes and/or unlawful activities conducted to evade taxes. Seizure is the confiscation of a person's property by a legal process. In forfeitures, the Federal Government assumes ownership of the seized asset.

During Fiscal Year (FY) 2009, the CI Division seized 1,624 assets, which is a 13 percent decline from the previous year, and a 28 percent decline from the six-year high in FY 2007. The decline in the number of assets seized can be partly attributed to the decrease in the number of illegal source and narcotics investigations initiated during that period and the loss of experienced special agents in recent years.

"The use of asset forfeiture has become one of the most important tools that Federal law enforcement can employ against criminals, so the Criminal Investigation Division must take steps to ensure that seizure opportunities are maximized," said J. Russell George, the Treasury Inspector General for Tax Administration. "The IRS needs to use all of its available resources to deprive individuals who knowingly violate the nation's tax laws of their ill-gotten gains."

TIGTA found several opportunities for the CI Division to improve its Asset Forfeiture Program. In addition, TIGTA's analyses of the CI Division's management information system data indicated that the CI Division may have missed some seizure opportunities. TIGTA analyzed a sample of investigations with money laundering or bank structuring violations and found that requests to pursue seizure were made in only 34 percent of the investigations with the percentage of requests varying significantly among field offices.

TIGTA recommended that the CI Division:

  • Require contractor employees to review the CI Division's management information system reports to identify recently-initiated narcotics and illegal source investigations where there is no corresponding seizure investigative activity;
  • Proactively engage the special agents regarding the identification of forfeitable assets;
  • Require contractor employees to periodically contact special agents to determine the status of the seizure and offer additional assistance; and
  • Conduct an internal study of narcotics and illegal source investigations, where the seizure of assets was not pursued, to determine if seizure opportunities were missed.