| The Internal Revenue Service gets involved in corporation fraud investigations when a large publicly traded or private corporation violates the Internal Revenue Code (IRC) and related laws. Generally, corporate schemes to evade taxation are broad in their scope, complex, and have a great negative economic impact on communities, employees, creditors, investors, and financial markets.
The President has created a new corporate task force, and the IRS Commissioner is a member. The task force seeks to provide direction for the investigation and prosecution of a wide variety of significant cases involving securities and accounting fraud, mail and wire fraud, money laundering, and tax fraud.
The IRS has personnel well trained for the investigation of corporate fraud cases. IRS Criminal Investigation Special Agents are financial investigators with exclusive investigatory jurisdiction over criminal violations of the tax laws. Corporate fraud cases often involve the falsification of corporate and individual tax returns, thereby making this an area particularly suited to the expertise of Criminal Investigation Special Agents.
The Criminal Investigation Special Agents are trained to recover financial data that may have been encrypted, password protected, or hidden by other electronic means. This skill is crucial because today's corporate fraud schemes call for the analytical ability to sift through intricate paper and computerized records.
Corporate officers are accountable for the content of their corporation's income tax returns, financial statements, and their conduct relating to the manipulation of corporate records. The Sarbanes-Oxley Act authorizes the imposition of stiff prison sentences to those convicted of the destruction, alteration, or falsification of records in order to impede federal investigations and bankruptcies.
The records of recent convictions of corporate officers are indeed sobering. In one case, a corporate officer was sentenced to over 12 years in prison after he and other officers used a maze of trusts and corporations to hide millions of dollars in income. Little or no taxes were paid on the income while the officers lived lavishly. In another case, an executive was sentenced to 20 years of imprisonment and to pay almost $100 million in restitution after he was convicted of various money laundering and conspiracy offenses. The executive was ordered to forfeit the assets of numerous domestic and foreign corporations, partnerships, and trusts in which he had a controlling interest along with his personal assets. Copyright 2010 LexisNexis, a division of Reed Elsevier Inc. |