Does the Work of the Internal Revenue Service End on April 15?

Now that the 2014 income tax filing season is over, it is a good time to take a look a look at IRS Criminal Investigation or “IRS CI,” the law enforcement part of the Internal Revenue Service. According to its mission statement, IRS CI investigates potential criminal violations of the Internal Revenue Code and related financial crimes in a manner to foster confidence in the tax system and compliance with the law. In other words, IRS CI “polices” the tax system all year round.

Earlier this month, IRS CI issued a report reflecting its significant accomplishments and enforcement actions in fiscal year 2014. In fact, they issue a report every year for the purpose of highlighting the agency’s successes and conveying the priorities of the organization.

According to the report, IRS CI initiated 4,297 cases in FY 2014, focusing on international tax fraud, return preparer and questionable refund fraud, public corruption, bank secrecy act violations, significant money laundering investigations and terrorist financing cases.

(Identity theft-related tax refund fraud is another priority area, but I will have more to say about it in a related article.)

As the only federal law enforcement agency with jurisdiction over federal tax crimes, IRS CI boasts the highest conviction rate in all of federal law enforcement in FY 2014 - at 93.4%. It is proud that it is routinely called upon by prosecutors across the country to be the lead financial investigative agency on a wide variety of financial crimes.

The 40-page report summarizes IRS CI activity throughout the fiscal year and includes case summaries on a range of tax crimes, money laundering, public corruption, terrorist financing and narcotics trafficking financial crimes. Two of the biggest stories of the year are the investigations of Credit Suisse and Bank Leumi. In the largest criminal tax case ever filed, Credit Suisse pleaded guilty to conspiracy to aid and assist U.S. taxpayers in filing false income tax returns and agreed to pay a total of $2.6 billion.

Here are a few summaries of recent local investigations, as reflected in court records from the Southern District of New York and the Eastern District of New York:

· Shlomo Avital was sentenced to 3 years of probation on January 6, 2015 for income tax evasion. He was ordered to pay restitution of $155,922 to the Internal Revenue Service and a $15,000 fine.

· Efrin Cishooga was sentenced to 5 years of probation on December 3, 2014 for making and subscribing a false tax return. He was ordered to pay restitution of $239,044 and pay a $25,000 fine.

· Howard Halbreich was sentenced to 2 years of probation on November 14, 2014 for aiding tax fraud. He was ordered to pay restitution of $104,978 to the Internal Revenue Service and perform 200 hours of community service.

· Nageswara Maruri was sentenced to 45 days in prison and 2 years of supervised release on April 14, 2015 for conspiracy to commit wire and health care fraud and ordered to pay restitution of $7,503,605.

· Michael Mitchell was sentenced to 36 months in prison on April 16, 2015 for income tax evasion and securities fraud.

· Can Ozkal on November 25, 2014 to 5 years of probation including 6 months of home detention for willful failure to collect and pay over IRS FICA taxes. He was ordered to pay restitution of $180,140 to the Internal Revenue Service.

· Uday Raval was sentenced to 2 years of probation, including 1 year of home confinement, on March 20, 2015 for money laundering.

· Vinod Sabnani was sentenced to 6 months in prison on December 16, 2104 for making and subscribing a false tax return. He was ordered to pay restitution of $610,625 to the Internal Revenue Service.

If you are interested in reviewing the report, the press release and the link to the report can be found at:

http://www.irs.gov/uac/Newsroom/IRS-Criminal-Investigation-Releases-Fiscal-Year-2014-Annual-Report