 |
25.1.3.1
(01-01-2003)
Overview
-
This section discusses criminal referrals and
prosecutions. Criminal prosecutions serve to enhance voluntary compliance.
The identification of potential criminal cases by compliance employees is
an important part of this process. When firm indications of fraud exist and
criminal criteria are met, the compliance employee should prepare Form 2797,
Referral Report of Potential Criminal Fraud Cases. The fraud referral specialist
(FRS) is available to assist (determine if firm indications of fraud are present,
criminal criteria has been met, etc.).
25.1.3.1.1
(01-01-2003)
Background
-
The primary objective of CI is the prosecution,
conviction and incarceration of
individuals
who violate criminal tax laws and related offenses. The Federal
Sentencing Guidelines tie the period of incarceration to the monetary value
of the violation, and consequently, the amount of the
"tax loss
"
(see 2 below) must usually be higher than the minimum LEM criteria
for a sentence of incarceration to be imposed. Tax loss is commonly referred
to as
"criminal criteria."
United States Attorneys are
reluctant to use their resources to prosecute individuals who cannot be sent
to prison. When evaluating a criminal fraud referral, it is essential to determine
if the individual is likely to be incarcerated if convicted.
-
"Tax loss"
as defined for
individual taxpayers in the Federal Sentencing Guidelines, may encompass amounts
greater than the criminal tax computation in the Special Agent’s Report.
It may include amounts from years outside of the prosecution period, it may
also include state tax loss, depending upon the determination of the taxpayer’s
"relevant conduct"
as it relates to those amounts. Tax loss
is computed using all of the years for which a preponderance of the evidence
shows that the understatements or tax due is attributed to fraud. The criminal
tax computation differs from the civil tax computation, as it includes only
those adjustments due to the criminal conduct of the taxpayer.
|
|
|
