IRS criminal investigation's 2016 annual report on illegal source tax crimes

On February 27, IRS Criminal Investigation ("CI") released its 2016 Annual Report (the "Report"). The Report addresses several items from CI's 2016 fiscal year, including investigation statistics, staff changes, and top priorities. While the Report addresses various tax crimes CI investigated in 2016, this article focuses on illegal source tax crimes. Illegal source tax crimes involve illicit funds obtained through criminal activity separate from any tax crimes. Because illegal source tax crimes involve multiple criminal acts, they are often serious in nature and labeled as "high impact area cases." A general understanding of the overall Report provides helpful context for its assessment of illegal source tax crimes. The Report statistics and stated priorities are briefly presented. In addition to tax crimes, CI plays an active role in investigations of large-scale criminal activity reaching well beyond the scope of tax crimes.