The Internal Revenue Service Criminal Investigation (CI) division’s annual report indicates the IRS has been using data analytics technology to do “predictive policing” to uncover potential tax cases.
“We prioritized the use of data in our investigations in fiscal 2018,” said IRS CI chief Don Fort in a statement. “The future for CI must involve leveraging the vast amount of data we have to help drive case selection and make us more efficient in the critical work that we do. Data analytics is a powerful tool for identifying areas of tax noncompliance.”
Though still in the early stages of using data analytics, Fort cited some success already:
“One particularly noteworthy success is the launching of the Nationally Coordinated Investigations Unit (NCIU). This unit relies heavily on data analytics to help drive future case selection. In 2019, the NCIU will move from ‘proof of concept’ to an official CI section. The NCIU has already referred more than 50 leads to CI field offices, and we expect that number to grow substantially this year.”
A major focus for IRS criminal investigators this year has been cases involving international tax enforcement, employment tax, tax refund fraud, and tax-related identity theft. The IRS has also been investigating instances of public corruption, cyber crime, terrorist financing, and money laundering.
“This report shows that as financial crime has evolved and proliferated around the world, so have IRS Criminal Investigation special agents and their abilities to track the proceeds of financial crime,” said IRS commissioner Chuck Rettig in a statement. “CI uses cutting-edge technology combined with sophisticated investigative work to bring the most impactful cases that affect tax administration. I am extremely proud of our special agents and professional staff and their work serving the nation.”