A report released today by the Treasury Department’s Inspector General for Tax Administration outlines some of the difficulties that the IRS has had in prosecuting criminal tax fraud in the tax-exempt sector and provides statistics supporting an overall decline in such cases in the last 3 years.
The findings of the report also suggest that investigations into tax-exempt organizations have been less successful than other investigations, yielding only 35% convictions or guilty pleas (the average for all investigations is 53%). Victor Song, chief of the Criminal Investigation Division, took issue with that statistic and responded saying that 81.8% is the conviction rate for tax-exempt cases if measured only by those that see trial.
Another report released separately today urges the IRS to act more aggressively with section 527 tax-exempt political organizations that file late or incomplete forms. The report estimates that $5.3 million could be collected by pursuing those applicable penalties.