A Conversation With ... Nancy Cummins

What is the role of the Internal Revenue Service’s Criminal Investigation unit?
Compared to the civil side, we are examining the intent of the taxpayer. If someone intentionally is defrauding the IRS or trying not to pay what they should be paying, that’s where we come in. … If you have the criminal intent to break our tax laws, it is our duty and our function to investigate you and recommend prosecution (which) includes the possibility of jail time. When you’re audited civilly, the potential is fines and penalties and payment of taxes due and owing. There are eight Criminal Investigation agents in Springfield, and we have one support staff and one manager.

What is the daily job of IRS-Criminal Investigation special agents?
Our job duties include search warrants and arrests. … We interface with other law enforcement agencies – the county, the city and the state Highway Patrol, and other federal agencies as well. With cases that we work, we might do surveillance. We might do trash runs, where we go through people’s trash and get financial leads from it. We do witness interviews during our investigations (and) we deal a lot with banks and subpoena bank information.

Why is it important to enforce tax laws?
Taxes benefit everyone. … If we can’t get any money, nobody will be driving on the roads. Children will not be going to public schools. (People) will not have Social Security benefits. It all goes together. What Congress does, how they decide where the money goes – we have no control over that. … I don’t think people look at the big picture. They feel that they’re getting squeezed, and they look at all of the people who are getting away with not paying taxes.

Tell us about some of the unusual cases you’ve worked.
The laws are pretty consistent. What becomes crazy is the types of businesses (violators) are in. I’ve worked (cases with) strip clubs, a septic tank cleaner, an orthotic shoe salesman (and) a pharmacist. What I’ve found through the years is that if people are not filing tax returns properly, they’re probably not paying their sales tax (or) taking out the correct employment taxes for their employees (or) licensing their cars correctly. … If they’re dirty in one place, they’re dirty everywhere. I worked a case years ago, a prison scam, and (prisoners) were actually going into files of kids who had died, and putting those Social Security numbers with their names and typing them up as W-2 forms from employers.

How do companies arrive on the radar for an IRS audit?
We get lots of leads from other government agencies. Our civil division often has referrals, after people come in (and) say, “My business associate has stolen (money) and I want to report it,” or “I was recently fired from my employment, and I feel that they’ve been doing this and this.” (Audits are assigned) a lot of times by a computer check (and) statistical data. It’s kind of like setting up parameters in a computer database, and whoever falls outside may be audited.

How can business owners protect themselves against financial crimes?
The big thing I’ve seen – because we have embezzlers – is businesspeople who are making millions of dollars or thousands of dollars, and they have no clue that Betty Lou the bookkeeper has set up her own company and is funneling checks. A lot of that is being involved in your business. Know your processes. Divide up the duties so one person pays the check and one person authorizes the check.
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