Enforcement of the statutes governing tax fraud falls on the IRS Criminal Division:

As financial investigators, IRS Criminal Investigation (CI) Special Agents fill a unique niche in the federal law enforcement community. Because of our financial investigative expertise, CI is involved in most of the regional corporate fraud task forces. CI has exclusive investigatory jurisdiction over criminal violations of the Internal Revenue Code (IRC). Corporate fraud frequently involves violations of the IRC though falsification of corporate and individual tax returns.

Today’s sophisticated corporate fraud schemes demand the analytical ability of financial investigators to wade though complex paper and computerized financial records. Due to the increase in the automation of financial records, CI Special Agents are trained tin recovering computer evidence. Along with their investigative skills, Special Agents also process computer investigative sills that enable them to recover financial data that may have been encrypted, password protected, or hidden by other electronic means.

The Sarbanes-Oxley Act provides additional investigative tools to help combat corporate fraud. This Act made provisions in the law, which hold corporate officers accountable for their content of their corporation’s income tax returns, financial statements, and their conduct relating to the manipulation of corporate records. The Act imposes stiffer sentences of up to 20 years in prison for the destruction, alteration or falsification of records in order to impede federal investigations and bankruptcies.¹³

Early in the current Bush Administration, there was a great deal of discussion regarding enforcing the laws against corporate tax fraud:

The Bush administration and Congress are vowing to crack down on corporate tax fraud and avoidance by seeking regulatory and legislative changes and stepping up enforcement and prosecution efforts. The Justice Department has intensified actions to identify, investigate and punish tax dodgers, including corporations, according to an April 6 news release from the Internal Revenue Service, the U.S. taxing authority. “People who engage in, facilitate or promote tax fraud are increasingly likely to be on the receiving end not only of civil enforcement actions but also of criminal prosecution,” Eileen O’Connor, assistant attorney general for the tax division said.¹⁴

Furthermore:

In March, 2004, Treasury Secretary John Snow said that his department is clamping down on abusive tax shelters — including those involving foreign government-owned infrastructure — used by corporations and individuals to escape their tax obligations. He said the IRS has increased audits of tax-shelter promoters and their clients and, along with other Treasury offices, has taken steps to shut down certain tax shelters through increased disclosure requirements. Snow said his department also has recommended draft legislation that would impose “meaningful” penalties on the users of these schemes who fail to disclose relevant transactions and the promoters who fail to register such transactions or maintain lists of tax-shelter users. In a separate development, the Senate Finance Committee has decided to review methods of allocating profits by multinational corporations between their U.S.-based operations and foreign subsidiaries to see whether they are misusing IRS rules to avoid paying a fair share of their U.S. taxes.¹⁵

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