After the stormy decision by President Obama to swallow his pride and agree to a 2 year extension of the Bush Tax Cuts, the Democrat Party bemoaned a loss of tax revenues. However, the administration may have had another tune in mind and that tune originates in the Internal Revenue Service.
The Internal Revenue Service has a Criminal Investigation Division (CI) with 4,100 employees including 2,700 special agents. The CI Division is the Criminal Law Enforcement Arm of the IRS. There has been a CI Division for almost a century and CI has one of the highest conviction rates in federal law enforcement.
In January 2010, CI got a new boss. Victor S.O. Song, a native of Hawaii, became Chief of the Criminal Investigation Division. Mr. Song is a fairly private federal officer and is infrequently seen in public. Tax revenue is a vital source of income to fund the federal government. Whatever marching orders Mr. Song has received from the White House have never been made public. However, we can look at his record of going after tax payers so far and, after one year as Chief of the CI Division, the results are pretty startling.
The CI Division are the cops on the IRS beat. They have guns and can put you in the federal slammer for a long time. You really don’t want to have the CI Division investigating you. The statistical data presented on the IRS web site gives a sobering picture. This statistical data shows that of the many prosecution recommendations that come from CI, the vast majority end in a criminal conviction. CI’s conviction rate for federal tax prosecutors has never fallen below 90% The IRS web site reports over 80% of those convicted are sent to federal prison. Currently one of these prison inmates is the actor Wesley Snipes. The average prison sentence is 47 months. If you think CI’s cases are easy, take a look at Al Capone who died in prison at Alcatraz thanks to the CI Division.
The Federal Government operates on a fiscal year calendar starting each October 1st and ending the following September 30th. We are currently in Fiscal Year of 2011, or FY2011 in government speak. This fiscal year, Mr. Song has a prosecution rate that, when annualized, is 183% of last year’s rate. When comparing the prosecution rate to the Fiscal Year before Mr. Song took the helm, his number of prosecutions would be 216% of that FY 2009 year. His convictions for those he chooses to prosecute are running at 177% over the year before he became Chief of the CI Division. There is a new sheriff in town and his name is Victor Song.
Like all law enforcement agencies in our country, you get a lot of grandstanding if you get a high profile conviction. Mr. Song has been quoted as follows:
March 31, 2010 - "There is no secret formula that can eliminate a person’s tax obligations."
April 15, 2010 - "These cases represent a significant priority for IRS."
July 29, 2010 - "Today’s sentencings serve as a reminder that IRS is committed to ensuring all taxpayers pay their fair share of taxes."
The Federal Government continues to run a significant deficit. The Democrats have complained loudly about the extension of the Bush Tax Cuts with many on the left wanting all of them to expire resulting in the greatest tax hike in history. With the appointment of his new Chief of IRS Criminal Investigation perhaps it is President Obama who is singing a Victory Song.
Robinson & Henry P.C. is a Law Firm with a significant Tax Practice including Criminal Tax Defense. They are located at 757 Maleta Lane, Castle Rock, CO 80108, ph. 303-688-0944.