Talking Tax Taxpayers 'Gamble' by Committing Fraud, Even With Diminished IRS
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Dec 3, 2025 Carolyn Schenck, a former IRS attorney with two decades of experience in tax evasion, shares her insights on tax fraud enforcement in a time of reduced IRS resources. She warns that there's no federal statute of limitations for fraud, making any gamble on weakened enforcement risky. Schenck discusses how staffing cuts could embolden tax cheats but emphasizes the potential for increased IRS efforts, especially in digital assets like crypto. She also highlights the need for better resources and technology to combat illegal tax shelters.
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Fraud Enforcement Remains A Priority
- The IRS still prioritizes fraud enforcement despite staffing challenges.
- Restoring staff, tools, and funding would return the agency to prior effectiveness.
Three Steps To Make Enforcement Proactive
- Increase resources, give agents better technology, and create dedicated task forces.
- These steps let the IRS proactively investigate issues rather than just reactive return audits.
Weakened IRS Might Tempt Fraud, But Risk Is High
- Perception of a weakened IRS can embolden some taxpayers to try fraud.
- But long civil and criminal reach plus high conviction rates make fraud a risky gamble.