What is the role of the Criminal Investigation Division (CI) of the Internal Revenue Service (IRS) in organized crime law enforcement, and what activities does the CI perform to fulfill that role?

Question

What will be an ideal response?

Answer 1

The CI seeks evidence of criminal violations for prosecution by the Department of Justice. In particular, agents seek out information relative to income that has not been reported.
Both direct and indirect methods are used. The direct method consists of the identification of specific items of unreported taxable receipts, overstated costs and expenses (such as personal expenses charged to business, diversion of corporate income to office-stockholders, allocation of income or expense to incorrect year in order to lower tax, etc.), and improper claims for credit or exemption.
The indirect method is the net worth theory: "The government establishes a taxpayer's net worth at the commencement of the taxing period, deducts that from his or her net worth at the end of the period, and proves that the net gain in net worth exceeds the income reported by the taxpayer"
Agents examine bank records, canceled checks, brokerage accounts, property transactions, and purchases, compiling a financial biography of the subject's lifestyle in order to prove that proper taxes have not been paid.