1. Overview of the IRS Overview of the Internal Revenue Service and Criminal Investigation Division Internal Revenue Service—Criminal Investigation International Operations – International Training Team

2. Overview of the IRS Internal Revenue Service The Internal Revenue Service is the United State’s tax collection agency and administers the Internal Revenue code enacted by Congress.

3. Overview of the IRS Internal Revenue Service IN FISCAL YEAR (FY) 2009*: The IRS received over 236 million tax returns. The IRS collected over $2.3 trillion in federal taxes. *Internal Revenue Service Data Book, 2009

4. Overview of the IRS Internal Revenue ServiceInternal Revenue Service IN FISCAL YEAR (FY) 2009*: The IRS had an annual operating budget of more than $11.7 billion. The IRS employed a total work force of 105,814 (including seasonal and part-time employees). The average cost of collecting $100 was 50 cents. *Internal Revenue Service Data Book, 2009

5. Overview of the IRS The term “Tax Gap” is defined as the aggregate amount of true tax liability imposed by law for a given tax year that is not paid voluntarily and timely. Estimate of the overall gross tax gap (for all federal taxes) for 2001 is $345 billion*. TAX GAP??? Internal Revenue Service Data Source: IR-2006-28, Feb 14, 2006 Article, IRS UPDATES TAX GAP ESTIMATES

6. Overview of the IRS IRS Organizational Chart

7. Overview of the IRS Mission Statement of IRS Criminal Investigation Division To serve the American public by investigating potential criminal violations of the Internal Revenue Code, and related financial crimes, in a manner that fosters confidence in the tax system and compliance with the law.

8. Overview of the IRS IRS-CID Organization Chart Chief Deputy Chief Director of Field Operations (4) Special Agent in Charge (26) Assistant Special Agent in Charge Supervisory Special Agent Special Agent Tax Fraud Investigative Assistant Compliance Support Specialist

9. Overview of the IRS Criminal Investigation Map Pacific (Laguna Niguel): Denver, Los Angeles, Las Vegas, Oakland, Phoenix, Seattle Midstates (Dallas): Chicago, Dallas, Detroit, Houston, San Antonio, St. Louis, St. Paul North Atlantic (Philadelphia): Boston, Cincinnati, New York, Newark, Philadelphia, Pittsburgh Southeast (Atlanta): Atlanta, Charlotte, Miami, Nashville, New Orleans, Tampa, Washington DC

10. Overview of the IRS 4,200 employees worldwide –2,700 Special Agents IRS Criminal Investigation is the only agency with jurisdiction over Title 26 (Tax) violations The Criminal Investigation Division of the IRS

11. Overview of the IRS LEGAL SOURCE47% -Income Tax -Motor Fuel Tax -Employment tax -Tax RP Schemes -Other Taxes ILLEGAL SOURCE (not including Narcotics)40% -Public Corruption -Human Trafficking -Bank Fraud -Many others NARCOTICS RELATED FINANCIAL CRIMES9% TERRORIST FINANCING4% Types of Investigations 11

12. Overview of the IRS FY10 Direct Investigative Time FY08FY09FY10 Legal Source51.2%52.4%52.6% Illegal Source35.3%34.8% Narcotics12.3%11.5%11.2% DIT for Counterterrorism was 1.7% in FY10

13. Overview of the IRS All Investigations: FY 2010FY 2009FY 2008 Investigations Initiated470641213749 Prosecution Recommendations303425702785 Information/Indictments264523352547 Total Convictions218421052144 Total Sentenced*217222291957 Percent to Prison81.5%81.2%80.9% Average Months to Serve464440 Statistics – All Investigations *Sentence includes confinement to federal prison, halfway house, home detention, or some combination thereof. Data Source: Criminal Investigation Management Information System

14. Overview of the IRS Money Laundering Investigations: FY 2010FY 2009FY 2008 Investigations Initiated159713411422 Prosecution Recommendations124010481305 Indictments / Informations10669361200 Sentenced751753686 Incarceration Rate* 83.8%85.9%84.7% Average Months to Serve697267 Statistics – Money Laundering *Sentence includes confinement to federal prison, halfway house, home detention, or some combination thereof. Data Source: Criminal Investigation Management Information System

15. Overview of the IRS FY2009 Legal Source Cases Conviction Rate90.5% Statistics – Conviction Rate

16. Overview of the IRS Special Agent’s Report Flowchart (Tax)

17. Overview of the IRS Special Agent’s Report Flowchart (Non-Tax)

18. Overview of the IRS FY10 Publicity Rate Overall publicity rate continues to be high – 87.3% Legal income publicity – 92.4% Illegal income publicity – 91.1%

19. Overview of the IRS FY 2010 Areas of Focus International/Off Shore Enforcement Return Preparer Fraud Corporate Fraud Employment Tax Abusive Tax Schemes Non-Filers Money Laundering / BSA Counterterrorism

20. Overview of the IRS Sources of Investigations Other IRS Operation Division General Public Other Law Enforcement Agencies Newspaper, television, radio or internet Requests from the United States Attorney’s Office Cooperating Defendants and Informants

21. Overview of the IRS Authorities Given to Special Agents Carry firearms Make arrests Conduct surveillance Obtain information Execute search and arrest warrants

22. Overview of the IRS Special Agent Qualifications US Citizen Under age of 37 15 hours of college accounting credits Written test Skills assessment exercise Panel Interview Background Investigation Drug Test Tax Audit Medical Exam 22

23. Overview of the IRS Special Agent Training Located at Federal Law Enforcement Training Center (FLETC) 12-week Criminal Investigator Training Program 14-week IRS-CID Special Agent Investigative Techniques Program

24. Overview of the IRS Special Agent Specialized Duties Centralized Case Reviewer Computer Information Specialist Undercover Agent Asset Forfeiture Coordinator Technical Equipment Agent Public Information Officer Instructor

25. Overview of the IRS Special Agent Collateral Duties Firearms/Defensive Tactics Instructor Fitness Coordinator Recruiter On the Job Instructor Contact Agent

26. Overview of the IRS IRS-CID Attachés Around the World Bridgetown, Barbados Ottawa, Canada Bogotá, Colombia Frankfurt, Germany London, England Hong Kong, China Baghdad, Iraq Mexico City Mexico Beijing, China Panama City, Panama Sydney, Australia