TAX ADMINISTRATION: IRS Undercover Operations Management Oversight Should Be Strengthened.
Abstract
Senators Harry Reid and Richard Bryan asked GAO to review how the Internal Revenue Service (IRS) manages its undercover operations. This request stemmed from concerns with IRS' management of an undercover operation, called Project Layoff, carried out in 1984 and 1985 during which IRS agents established a Las Vegas bookmaking business in an attempt to identify unreported gambling income. This operation has resulted in continuing allegations of misuse of funds and has prompted broader concerns over the adequacy of IRS' controls and oversight of its undercover operations. GAO addressed Project Layoff more specifically in a separate report. An undercover operation is a potentially risky investigative technique. IRS' Criminal Investigation Division (CID) uses undercover operations to help investigate legal activities such as money laundering and fraudulent tax return preparation. In doing so, CID special agents assume identities other than their own. A special agent might pose as a taxpayer to obtain evidence that a tax return preparer is preparing fraudulent returns or as a financial consultant willing to launder money for a suspected drug dealer. During money laundering operations, which involve over half of IRS' undercover activities, IRS agents may come in contact with dangerous drng dealers, wear concealed recording equipment, and handle large sums of money. They also must avoid entrapping the subject of the investigation.
Document Details
- Document Type
- Technical Report
- Publication Date
- Apr 01, 1992
- Accession Number
- ADA290714
Entities
Organizations
- United States Government Accountability Office