NCJ Number
80960
Date Published
1981
Length
10 pages
Annotation
Findings are presented from the General Accounting Office's investigation of Internal Revenue Service (IRS) efforts to collect taxes owed by organized crime figures.
Abstract
The study consisted of an examination of 66 organized crime cases for which investigative work had been completed by IRS offices in Chicago, Los Angeles, Manhattan, Philadelphia, and Brooklyn (New York) from October 1, 1977, through December 31, 1979. Because the study involved only organized crime cases completed during the period examined and 81 percent of these cases had not reached the collection phase, no overall conclusions on IRS collection efforts could be drawn. However, information was obtained on the total additional taxes and penalties assessed, the outstanding balances, whether the accounts were collectible, and how actively IRS was trying to collect the amounts due. Of the 66 cases examined, 12 had tax assessments totaling $380,127.99. Payments of $189,297.82 had been made on 8 of the 12 cases, of which 3 had been paid in full. Nine cases had outstanding balances of $190,830.17. The remaining 54 cases had no final tax assessment, so collection action had not yet been initiated. An IRS study issued on May 28, 1980, showed a high incidence of uncollectible accounts in cases involving an organized crime strike force. In 16 of 21 cases, the taxpayers disposed of their assets and put them beyond the Government's reach an average of 4.7 years before final assessment. Although IRS does not give priority to the collection of monies from known organized crime figures (priority is given to the higher dollar amounts), nothing in IRS regulations precludes the assumption of such a priority. IRS recommendations for ways to improve the collectibility of organized crime cases are provided. Tabular data are included. (Author summary modified)