DOJ Tax Division Issues New Directive Aimed at Stolen Identity Refund Fraud
On September 18, 2012, the Department of Justice Tax Division issued a policy directive (Directive 144) that delegates the ability to approve prosecutions involving the filing of false tax returns using stolen identities down to the various U.S. Attorney’s offices. This eliminates the requirement in criminal tax cases that all prosecutions be approved by the Tax Division in Washington. The change is meant to streamline the process of bringing indictments in such cases. The Tax Division’s Assistant Attorney General Kathryn Keneally and the IRS have made Stolen Identity Refund Fraud or “SIRF” cases a top enforcement priority. Congress has also held hearings on the issue. “The massive increase in these crimes over the last few years is due primarily to the prevalence of electronic filing of tax returns,” said Jim Mastracchio, Co-Chair of BakerHostetler’s Tax Controversy Practice. According to Jay Nanavati, a former Tax Division Assistant Chief, “Additional reasons for the epidemic include the issuance of tax refunds before the IRS has verified the accuracy of the tax returns by matching them to Forms W-2 and 1099 and the issuance of refunds in the form of untraceable pre-paid debit cards.”
For more information on the government’s efforts to prosecute tax evasion, please contact Jim Mastracchio at (202) 861-1650 (firstname.lastname@example.org) or Jay Nanavati at (202) 861-1747 (email@example.com), BakerHostetler, 1050 Connecticut Ave., Washington, DC 20036 (www.bakerlaw.com).