1. IRS, CRIMINAL INVESTIGATION AND IDENTITY THEFT/DATA BREACHES
Presented by:
Wade Cassamajor
Special Agent

2. Internal Revenue Service Criminal Investigation
Criminal Investigation serves the American public by investigating potential criminal violation of the Internal Revenue Code and related financial crimes in a manner that fosters confidence in the tax system and compliance with the law.

4. IRS,CI History
Originally the Intelligence Unit, IRS, Criminal Investigation was established on July 1, 1919 by the IRS Commissioner
Six US Post Office Inspectors was transferred to CI to start agency
Gained national prominence in ‘30s for convicting Al Capone
In July 1978, the Intelligence Unit changed to IRS, CI

5. Common Violations Tax Evasion Attempt to evade the payment of tax
Additional tax due and owing
Willfulness
Declaration Under the Penalties of Perjury (False Tax Return)
Prepared a tax return(s)
False declaration
Money Laundering
Specified Unlawful Activity
Knowledge
Conduct or attempt to conduct financial transaction
Intent to promote SUA, evade taxes, conceal, or avoid reporting requirements.

6. Identity Theft Coordinator Role
Processing ID Theft Leads
Leads are sent to a scheme development center
Community Outreach / Liaison
Law enforcement
Bank Representative
Businesses

7. The Scope of the Problem
$5.8 Billion in fraudulent refunds were paid out by the IRS in 2013 (GAO Report, ID Theft and Tax Fraud)
In 2014, an 17.6 million Americans were victims of identity theft (Bureau of Justice Statistics, September 2015)
There were a total of 781 data breaches in the U.S. (Identity Theft Resource Center)

8. IRS, Criminal Investigation’s Role
IRS, CI investigation has helped convict over 2,000 identity thieves
Currently, there are approximately 1,700 investigations.
*Incarceration includes confinement to federal prison, halfway house, home detention, or some combination thereof.
Data Source: Criminal Investigation Management Information System

9. Data Breaches
A data breach is the intentional or unintentional release or theft of secure information. It can be the improper disposal of personally identifiable information in the trash or a sophisticated cyber-attack on corporate computers by criminals. It can affect companies large or small.
Not all data breaches results in identity theft, and not every identity theft is tax-related identity theft.
Tax-related identity theft is when someone uses your personal identifiable information to file a false tax return claiming a fraudulent refund
Most fraudulent tax returns is stopped by the IRS

10. Anatomy of a Hack

11. Surface Web, Deep Web, Dark Web

12. Cyber Underworld

13. Rules Governing Behavior

14. The Cyber Crime Threat
These groups continually attack systems for monetary gain
Malware
Botnets
Spam and phishing
The realities of coding:
1969 Apollo Guidance Computer – 145,000 LOC
Primary Flight Software for Space Shuttle in 1980s – 400,000 LOC
Microsoft Office 2013 – 45 Million LOC
Large Hadron Collider Million LOC
U.S. HealthCare.gov – 500 Million LOC
According to Carnegie Mellon University, commercial software typically has 20 to 30 bugs for every thousand line of code

15. Actions When Compromised
Contact IRS Stakeholder Liaison When Compromise Detected
Stakeholder Liaison will refer Information within IRS (i.e. Criminal Investigations, Return Integrity & Compliance Services)
Follow State Reporting Requirements (i.e. State Attorney General, State Consumer Protection Bureaus, State Police)
Report Compromise to FBI, US Secret Service, Federal Trade Commission

16. Actions When Compromised
If possible, determine what type of PII has been lost or stolen. This will assist in determining if theft is tax-related.
Seek information about the steps being taken by the company that lost your data.
Notify one of the three major credit bureaus to place a free fraud alert on you credit file
Consider a credit freeze, which will prevent access to your credit records
Close any accounts opened without you permission
If theft is tax related, complete and submit IRS Form 14039, Identity Theft Affidavit.

18. Non-Technical Schemes
Dumpster Diving
Mail Theft
Social Engineering
Shoulder Surfing
Stealing Personal Items
Skimming
Pre-Texting
Man-in-the-Middle Attack

19. Phishing Schemes Pharming Vishing (“Voice Phishing”)
Search Engine Phishing
SMiShing
Malware Based Phishing
Phishing through Spam

20. Cyber Security Resources
United States Computer Emergency Readiness Team (
IRS Website (
Treasury Inspector General for Tax Administration (
Federal Trade Commission (

21. Q&A

22. Wade Cassamajor Special Agent Phone: 301-252-4278 Email: wade
Wade Cassamajor Special Agent Phone: