The IRS Criminal Investigation division has alleged about $3.4 billion in fraud from the more than 300 cases involving the employee retention credit in its inventory, according to CI Chief Jim Lee.
Some of CI’s ERC cases include seizure investigations, with many of the cases being relatively small at $1 million or less, Lee said October 26 at the UCLA Tax Controversy Institute, where he previewed some statistics that will be reported in CI’s 2023 annual report.
The data include $37 billion in fraud identified, 1.71 petabytes of digital data seized, and $271 million in seizures.
The seizure number is a drop from the multibillion-dollar seizures reported in recent years, driven largely by a few major cryptocurrency cases. That string started in part with a major seizure of terrorist financing cryptocurrency linked at least in part to Hamas in 2020.
In light of the October 7 terrorist attacks in Israel and continuing war, a group of lawmakers called for an investigation of how cryptocurrencies are used in terror financing.
Lee said that CI stands with its law enforcement partners regarding that conflict. He later told Tax Notes that CI continues to pursue sanctions violations and terrorism financing as it did with the 2020 Hamas case.
The Joint Chiefs of Global Tax Enforcement (J5) will be meeting again shortly for the fifth edition of its nearly annual challenge events, Lee said at the conference.
The J5 is an alliance between the heads of tax enforcement of the United States, Canada, the Netherlands, the United Kingdom, and Australia. Its challenge events involve collecting data and personnel from each of the members in one location to analyze and develop investigative ideas, generally in a concentrated period of approximately 24 hours.
Lee said the theme of the upcoming challenge will be use of bank data like what the United States collects under the Bank Secrecy Act to investigate noncompliance involving cryptocurrencies. He has recently made a point of discussing how CI uses Bank Secrecy Act data domestically.