The $80B in additional funding signed into law by our new administration and funded by a bipartisan Congress, is providing the funds necessary for the Service to beef up its Criminal Investigations Division (CID). The division has begun chasing down higher-end crypto currency scammers.
For those who don’t know, there are three basic types of IRS Employees. The first two are Revenue Agents and Revenue Officers who perform audits and collect tax liabilities. These are the regular people you deal with at the Service.
Then there’s a whole different division of agents in CID. Nicknamed the “accountants with guns”, they go after drug dealers, money launderers, and big time financial criminals. They speak the Queen’s English, actually know that debits go on the left-hand side of a journal entry, carry Glocks, and are to be feared without question.
The fact that CID is doing interviews for the general public and naming their targets, is the first surprise. They’re the thing of legend in our business. Most accountants will spend their entire career never meeting or even being contacted by one of them.
The fact that they’re going after crypto currency thieves is another revelation. We’ve known for years that criminal syndicates were using crypto for transactions.
Given legislation that was passed in the last couple of years, CID should be able to track these transactions back to their sources. This will probably lead to some interesting arrests.
Let me leave you with this…
About twenty years ago, I received an unexpected call from an IRS Agent asking if he could drop by to hand me a subpoena. There was nothing normal about this.
Usually the IRS just sends out a letter saying that they’re beginning an audit proceeding with a list of records they want to see. They don’t just casually drop by to hand you a subpoena.
The real twist was that the agent handing me the paperwork was a Special Agent from CID.
At the time I had a diamond dealer down on Jeweler’s Row who had screwed one of Chicago’s leading families on an engagement ring. The client had sold a rock for $25 g’s that wasn’t worth $5k, hence my interesting visitor.
So a couple of months later, I was sitting in my conference room with two CID agents and my attorney who was dutifully recording my answers and making sure that I wouldn’t face an Obstruction of Justice charge in this criminal proceeding.
To say that the agent’s questioning of me was terse would be an understatement. They were intelligent, thorough, and by the book right up to the point when they asked about the client’s inventory balances.
This client had a seat on the Antwerp Exchange, and had provided me with a detailed inventory list for each return completed, showing the purchase price and type of each individual stone purchased. I pulled out my copy of the reports proving our year end inventory numbers, and all of a sudden the agents were sweeter than a candy store.
The second they saw that document, they knew that they had the proof they needed. They’d be able to go through the inventory list and prove that the stone wasn’t at all what my former client had said that it was. Moreover, they could also prove that he had knowingly defrauded the customer.
The agents fell all over themselves saying things like, “Mr. Amundson, we wish we had more practitioners like you. You’re a credit to the professionalism of our industry.” Blah. Blah. Etc. Etc. You get the idea.
And it all came down to the simplest of documentation procedures.
Would this have happened if the victim of the crime wasn’t a member of an extremely powerful Chicago family? Probably not. But obviously no one should be in the business of defrauding anyone in the first place.
Anyway, that was the one time in my 33 year career that I ever met a CID Agent.
We’re all going to get through this. Let’s get through it together.
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Sincerely yours,
Chris Amundson
President
Accounting Solutions Ltd.
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