Streamlining Legal Review of Criminal Tax Cases Would Strengthen Enforcement of Federal Tax Laws

GGD-81-25: Published: Apr 29, 1981. Publicly Released: Apr 29, 1981.

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The efficiency and effectiveness of the federal government's tax enforcement efforts have been hampered by a time-consuming and duplicative legal review process for criminal tax cases. About 75 percent of the investigations conducted by the Internal Revenue Service (IRS) do not lead to prosecutive recommendations or convictions.

Readily available legal assistance during investigations could reduce staff-day expenditures, thus improving IRS productivity in terms of the quality and timeliness of its investigations. However, it routinely does not obtain the assistance until after investigations are completed. Many criminal tax cases are declined for prosecution by IRS or Department of Justice attorneys who determine that such cases do not meet certain legal standards. Often, an attorney could have detected legal deficiencies during the investigative process. IRS established a means whereby special agents can seek such assistance by prereferring a case to IRS attorneys at any point during an investigation. This prereferral mechanism has not been used in many cases and has not fully met IRS needs. Although the legal review process clearly needs restructuring, the best means for doing so is not clear. GAO presented various alternatives for revising the process, all of which call for partial or complete elimination of one of the three current review levels.

Matter for Congressional Consideration

  1. Status: Closed - Implemented

    Comments: Justice and IRS have made several improvements toward streamlining the legal review process, resulting in improved timeliness and better enforcement of timeframes. The legal review of non-grand-jury criminal cases is still redundant and time consuming. No further congressional action is expected. GAO plans to address this issue at a future time.

    Matter: Congress should ensure that the Departments of Treasury and Justice develop a streamlined legal review process for criminal tax cases and that any revised system realizes potential cost savings while safeguarding taxpayers' legal rights.

Recommendations for Executive Action

  1. Status: Closed - Not Implemented

    Comments: Justice and IRS have made several improvements toward streamlining the legal review process. These have resulted in improved timeliness in the legal review process. Both IRS and Justice have adopted better enforcement of established timeframes for legal reviews and have increased the relative proportion of grand jury cases which reduced the workload of IRS attorneys.

    Recommendation: The Attorney General and the Commissioner of Internal Revenue should jointly develop a streamlined legal review process for criminal tax cases.

    Agency Affected: Department of Justice

  2. Status: Closed - Not Implemented

    Comments: Justice and IRS have made several improvements toward streamlining the legal review process. These have resulted in improved timeliness in the legal review process. Both IRS and Justice have adopted better enforcement of established timeframes for legal reviews and have increased the relative proportion of grand jury cases which reduced the workload of IRS attorneys.

    Recommendation: The Attorney General and the Commissioner of Internal Revenue should jointly develop a streamlined legal review process for criminal tax cases.

    Agency Affected: Department of the Treasury: Internal Revenue Service

 

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