Interview with the Chief of the IRS Criminal Investigative Division

I recently had the opportunity to record a podcast with Jim Lee, Chief of the IRS Criminal Investigative division. 

Mr. Lee is one of the principal law enforcement officers in the U.S. with responsibility for prosecuting tax evasion and money laundering.  His Division has one of the highest conviction rates in law enforcement, with more than 90% of his cases accepted for prosecution resulting in a conviction.

With his focus on money laundering and tax evasion, Mr. Lee's Division is eagerly anticipating the launch of the Corporate Transparency Act on January 1, 2024. 

The Corporate Transparency Act will require more than 30 million businesses in the U.S. to file a Beneficial Ownership Report with FinCEN - the Financial Crimes Enforcement Network of the U.S. Treasury.  Companies in existence on December 31, 2023 will have until the end of 2024 to file a first report.  Companies formed on or after January 1, 2024 will need to file an initial report within 30 calendar days of the date of formation. 

As Mr. Lee said in our podcast, "we follow the money."  The IRS CI has access to enormous amounts of data, including data gleaned from reports filed by financial institutions under the Bank Secrecy Act.  Mr. Lee's division uses that data to identify potential money launderers as a precursor to building a prosecution case.

In our discussion, we talked about the potential for using artificial intelligence (AI) in combination with the database that FinCEN is building under the Corporate Transparency Act.  Artificial Intelligence has the potential to review massive quantities of data in order to find "red flags" and other potential indicators of fraud.  Utilizing an AI tool, the IRS CI will be able to accelerate the process of searching for potential criminal activities.