Mission Creep from Within at the IRS: Why Criminal Investigation Special Agents Will Not Shrink the Tax Gap

Robert A. Warren, Timothy J. Fogarty, Philip A. Cola


Tax evasion on legal source income costs the U.S. Treasury an estimated $1 trillion annually.  The tax gap is the difference between what is owed and what is collected. The Internal Revenue Service (IRS)’s Criminal Investigation Division (CI) is the sole law enforcement agency responsible for combating tax evasion and IRS managers prefer that CI criminal investigators (special agents) pursue such cases. However, evidence suggests that only about a quarter of the cases investigated by special agents are tax gap cases, while the bulk are more exotic cases involving narcotics-related money laundering, Ponzi schemes, and identity theft. The authors surveyed 348 current and former special agents about their case preferences in order to determine the causes of this discrepancy, and then compared this data to statistical data obtained from the United States Government (USG) and prior qualitative research. This paper suggests several possible causes of the difference between the CI’s stated mission and its results. The closure of the tax gap is critical to the solvency of the USG and this is, to the authors’ knowledge, the first academic paper to address the problem of non-tax gap case selection by special agents and related consequences.

Keywords: Tax Gap, Internal Revenue Service, Criminal Investigation, Special Agent.

Full Text:



Allingham, M. G., & Sandmo, A. (1972). Income tax evasion: A theoretical analysis. Journal of Public Economics, 1(3-4), 323-338. https://doi.org/10.1016/0047-2727(72)90010-2

Anderson, D. M., & Stritch, J. M. (2015). Goal clarity, task significance, and performance: evidence from a laboratory experiment. Journal of Public Administration Research and Theory, 26(2), 211-225. https://doi.org/10.1093/jopart/muv019

Baird, L. S. (1976). Relationship of performance to satisfaction in stimulating and nonstimulating jobs. Journal of Applied Psychology, 61(6), 721-727. https://doi.org/10.1037/0021-9010.61.6.71

Bandura, A. (1993). Perceived self-efficacy in cognitive development and functioning. Educational Psychologist, 28(2), 117-148. https://doi.org/10.1207/s15326985ep2802_3

Black, T., Bloomquist, K., Emblom, E., Johns, A., Plumley, A., & Stuk, E. (2012). Federal tax compliance research; Tax year 2006 tax gap estimation (IRS Research, Analysis & Statistics Working Paper). Washington, D.C.: Internal Revenue Service.

Borry, E. L., DeHart‐Davis, L., Kaufmann, W., Merritt, C. C., Mohr, Z., & Tummers, L. (2018). Formalization and consistency heighten organizational rule following: Experimental and survey evidence. Public Administration, 96(2), 368-385. https://doi.org/10.1111/padm.12407

Bourdieu, P. (1977). Outline of a theory of practice (Cambridge Studies in Social and Cultural Anthropology, Vol. 16) (R. Nice, Trans.). Cambridge, England: Cambridge University Press.

Bowman, M. D., Carlson, P. M., Colvin, R. E., & Green, G. S. (2006). The loss of talent: Why local and state law enforcement officers resign to become FBI agents and what agencies can do about it. Public Personnel Management, 35(2), 121-136. https://doi.org/10.1177/009102600603500202

Breinholt, J. (2005). Taxing terrorism from Al Capone to Al Qaida: Fighting violence through financial regulation. Alexandria, PA: International Assessment and Strategy Center.

Bruffey, N. G. (1997). Job satisfaction and work excitement: Organizational considerations. Seminars for Nurse Managers, 5(4), 202-208.

Caldwell, D. F., & O’Reilly, C. A. (1982). Task perceptions and job satisfaction: A question of causality. Journal of Applied Psychology, 67(3), 361-369. https://doi.org/10.1037/0021-9010.67.3.361

Chen, C.-A. (2012). Explaining the difference of work attitudes between public and nonprofit managers: The views of rule constraints and motivation styles. The American Review of Public Administration, 42(4), 437-460. https://doi.org/10.1177/0275074011402192

Congressional Budget Office (2020). Trends in the Internal Revenue Service’s funding and enforcement. Washington, D.C.: Congressional Budget Office.

Congressional Budget Office. (2022). Budget. Congressional Budget Office. https://www.cbo.gov/topics/budget (Last Viewed on November 12, 2022).

Cory, S. N. (1992). Quality and quantity of accounting students and the stereotypical accountant: Is there a relationship? Journal of Accounting Education, 10(1), 1-24. https://doi.org/10.1016/0748-5751(92)90015-W

Costello, A. B., & Osborne, J. (2005). Best practices in exploratory factor analysis: Four recommendations for getting the most from your analysis. Practical Assessment, Research & Evaluation, 10(7), Article 7. https://doi.org/10.7275/jyj1-4868

Damjanovic, T., & Ulph, D. (2010). Tax progressivity, income distribution and tax non-compliance. European Economic Review, 54(4), 594-607. https://doi.org/10.1016/j.euroecorev.2009.09.003

DeHart‐Davis, L. (2009). Green tape and public employee rule abidance: Why organizational rule attributes matter. Public Administration Review, 69(5), 901-910. https://doi.org/10.1111/j.1540-6210.2009.02039.x

Department of the Treasury, Internal Revenue Service. (2019). Internal revenue service: Data book, 2018 (Publication 55B (Rev. 5-2019)). Washington, D.C.: Department of the Treasury, Internal Revenue Service.

de Vries, R. E., de Vries, A., & Feij, J. A. (2009). Sensation seeking, risk-taking, and the HEXACO model of personality. Personality and Individual Differences, 47(6), 536-540. https://doi.org/10.1016/j.paid.2009.05.029

Dimnik, T., & Felton, S. (2006). Accountant stereotypes in movies distributed in North America in the twentieth century. Accounting, Organizations and Society, 31(2), 129-155. https://doi.org/10.1016/j.aos.2004.10.001

Downey, H. K., Don, H., & Slocum Jr, J. W. (1975). Congruence between individual needs, organizational climate, job satisfaction and performance. Academy of Management Journal, 18(1), 149-155. https://doi.org/10.5465/255634

Dubin, J. A. (2007). Criminal investigation enforcement activities and taxpayer noncompliance. Public Finance Review, 35(4), 500-529. https://doi.org/10.1177/1091142106295757

Dubin, J., Graetz, M. J., & Wilde, L. L. (1990). The effect of audit rates on the federal individual income tax, 1977-1986. National Tax Journal, 43(4), 395-409. https://doi.org/10.1086/NTJ41788861

Foster, J. L. (1990). Bureaucratic rigidity revisited. Social Science Quarterly, 71(2), 223-238.

Friedman, A. L., & Lyne, S. R. (2001). The beancounter stereotype: Towards a general model of stereotype generation. Critical Perspectives on Accounting, 12(4), 423-451. https://doi.org/10.1006/cpac.2000.0451

Gerth, H. H., & Wright Mills, C. (1958). From Max Weber: Essays in Sociology. New York, NY: Oxford University Press.

Gist, M. E., & Mitchell, T. R. (1992). Self-efficacy: A theoretical analysis of its determinants and malleability. The Academy of Management Review, 17(2), 183-211. https://doi.org/10.2307/258770

Grant, A. M. (2008a). Does intrinsic motivation fuel the prosocial fire? Motivational synergy in predicting persistence, performance, and productivity. Journal of Applied Psychology, 93(1), 48-58. https://doi.org/10.1037/0021-9010.93.1.48

Grant, A. M. (2008b). The significance of task significance: Job performance effects, relational mechanisms, and boundary conditions. Journal of Applied Psychology, 93(1), 108-124.

Hackman, J. R., & Lawler, E. E. (1971). Employee reactions to job characteristics. Journal of Applied Psychology, 55(3), 259-286. https://doi.org/10.1037/h0031152

Hair, J. F., Anderson, R. E., Tatham, R. L., & Black, W. C. (1998). Multivariate data analysis (5th ed.). Upper Saddle River, NJ: Prentice Hall.

Hansen, S. (2021, April 13). IRS commissioner says tax gap could exceed $1 trillion per year. Forbes. https://www.forbes.com/sites/sarahhansen/2021/04/13/irs-commissioner-says-tax-gap-could-exceed-1-trillion-per-year/?sh=3f17edbf2dbd

Hayes, A. F. (2009). Beyond Baron and Kenny: Statistical mediation analysis in the new millennium. Communication Monographs, 76(4), 408-420. https://doi.org/10.1080/03637750903310360

Herzberg, F. (2005). Motivation-hygiene theory. In J. B. Miner (Ed.), Organizational behavior I: Essential theories of motivation and leadership (pp. 61-74). New York, NY: M. E. Sharpe, Inc.

Hu, L.-t., & Bentler, P. M. (1999). Cutoff criteria for fit indexes in covariance structure analysis: Conventional criteria versus new alternatives. Structural Equation Modeling: A Multidisciplinary Journal, 6(1), 1-55. https://doi.org/10.1080/10705519909540118

Ingram, J. R., & Lee, S. U. (2015). The effect of first-line supervision on patrol officer job satisfaction. Police Quarterly, 18(2), 193-219. https://doi.org/10.1177/1098611114567781

Internal Revenue Service. (2016). Federal tax compliance research: Tax gap estimates for tax years 2008-2010. Washington D.C.: Internal Revenue Service.

Internal Revenue Service. (2017). IRS: Criminal investigation 2016 - Annual report. Washington, D.C.: Internal Revenue Service.

Internal Revenue Service. (2018). IRS: Criminal investigation 2017 - Annual report. Washington, D.C.: Internal Revenue Service.

Internal Revenue Service. (2019a). Federal tax compliance research: Tax gap estimates for tax years 2011-2013. Washington D.C.: Internal Revenue Service.

Internal Revenue Service. (2019b). IRS: Criminal investigation - Annual report 2018. Washington, D.C.: Internal Revenue Service.

Internal Revenue Service. (2020). IRS: Criminal investigation - Annual report 2019. Washington D.C.: Internal Revenue Service.

Internal Revenue Service. (2021). IRS: CI - Annual report 2020. Internal Revenue Service Washington D.C.: Internal Revenue Service.

Internal Revenue Service. (2022). Internal revenue manual. Internal Revenue Service. https://www.irs.gov/irm

Ivancevich, J. M. (1978). The performance to satisfaction relationship: A causal analysis of stimulating and nonstimulating jobs. Organizational Behavior and Human Performance, 22(3), 350-365. https://doi.org/10.1016/0030-5073(78)90021-1

Johnson, R. R. (2012). Police officer job satisfaction: A multidimensional analysis. Police Quarterly, 15(2), 157-176. https://doi.org/10.1177/1098611112442809

Judge, T. A., Heller, D., & Mount, M. K. (2002). Five-factor model of personality and job satisfaction: A meta-analysis. Journal of Applied Psychology, 87(3), 530-541. https://doi.org/10.1037/0021-9010.87.3.530

Kanungo, R. N. (1979). The concepts of alienation and involvement revisited. Psychological Bulletin, 86(1), 119-138. https://doi.org/10.1037/0033-2909.86.1.119

Kish, G. B., & Donnenwerth, G. V. (1969). Interests and stimulus seeking. Journal of Counseling Psychology, 16(6), 551-556. https://doi.org/10.1037/h0028503

Kohn, M. L. (1971). Bureaucratic man: A portrait and an interpretation. American sociological review, 36, 461-474. https://doi.org/10.2307/2093086

Korman, A. K. (1971). Expectancies as determinants of performance. Journal of Applied Psychology, 55(3), 218-222. https://doi.org/10.1037/h0031154

Letter from Phillip L. Swagel, Director, Congressional Budget Office, to Honorable Lindsey Graham, Ranking Member, Committee on the Budget, United States Senate (2021, November 18). Re: Estimated revenue effects of increased funding for the Internal Revenue Service in H.R. 5376, the Build Back Better Act. https://www.cbo.gov/system/files/2021-11/57620-IRS.pdf

MacKenzie, S. B., & Podsakoff, P. M. (2012). Common method bias in marketing: Causes, mechanisms, and procedural remedies. Journal of Retailing, 88(4), 542-555. https://doi.org/10.1016/j.jretai.2012.08.001

Merton, R. K. (1940). Bureaucratic structure and personality. Social Forces, 18(4), 560-568. https://doi.org/10.2307/2570634

Miller, H. A., Mire, S., & Kim, B. (2009). Predictors of job satisfaction among police officers: Does personality matter? Journal of Criminal Justice, 37(5), 419-426. https://doi.org/10.1016/j.jcrimjus.2009.07.001

Mintzberg, H., Raisinghani, D., & Théorêt, A. (1976). The structure of “unstructured” decision processes. Administrative Science Quarterly, 21(2), 246-275. https://doi.org/10.2307/2392045

Morse, N. C., & Weiss, R. S. (1955). The function and meaning of work and the job. American Sociological Review, 20(2), 191-198. https://doi.org/10.2307/2088325

Nahm, A. Y., Rao, S. S., Solis-Galvan, L. E., & Ragu-Nathan, T. S. (2002). The Q-sort method: Assessing reliability and construct validity of questionnaire items at a pre-testing stage. Journal of Modern Applied Statistical Methods, 1(1), Article 15. http://doi.org/10.22237/jmasm/1020255360

Nayak, N. R. (2002). Job satisfaction and organizational commitment as factors of turnover intention of IRS procurement employees (UMI No. 3068419) [Doctoral dissertation, Walden University]. ProQuest Dissertations Publishing. https://www.proquest.com/docview/305455098?pq-origsite=gscholar&fromopenview=true

Oberfield, Z. W. (2009). Rule following and discretion at government's frontlines: Continuity and change during organization socialization. Journal of Public Administration Research and Theory, 20(4), 735-755. https://doi.org/10.1093/jopart/mup025

Oberfield, Z. W. (2014). Becoming bureaucrats: Socialization at the front lines of government service. Philadelphia, PA: University of Pennsylvania Press.

Organ, D. W., & Greene, C. N. (1974). Role ambiguity, locus of control, and work satisfaction. Journal of Applied Psychology, 59(1), 101-102. https://doi.org/10.1037/h0035826

Perry, J. L., & Hondeghem, A. (Eds.) (2008). Motivation in public management: The call of public service. New York, NY: Oxford University Press.

Peterson, R. A., & Kim, Y. (2013). On the relationship between coefficient alpha and composite reliability. Journal of Applied Psychology, 98(1), 194-198. https://doi.org/10.1037/a0030767

Petty, M. M., McGee, G. W., & Cavender, J. W. (1984). A meta-analysis of the relationships between individual job satisfaction and individual performance. The Academy of Management Review, 9(4), 712-721. https://doi.org/10.2307/258493

Podsakoff, P. M., MacKenzie, S. B., Lee, J.-Y., & Podsakoff, N. P. (2003). Common method biases in behavioral research: A critical review of the literature and recommended remedies. Journal of Applied Psychology, 88(5), 879-903. https://doi.org/10.1037/0021-9010.88.5.879

Posner, E. A. (2000). Law and social norms: The case of tax compliance. Virginia Law Review, 86, 1781-1819.

Rabinowitz, S., & Hall, D. T. (1977). Organizational research on job involvement. Psychological Bulletin, 84(2), 265-288. https://doi.org/10.1037/0033-2909.84.2.265

Rossotti, C. O. (1999). A summary of modernizing America’s tax agency (Publication 3349A (3-1999)). Washington D.C.: Internal Revenue Service.

Rotondi Jr, T. (1975). Organizational identification: Issues and implications. Organizational behavior and human performance, 13(1), 95-109. https://doi.org/10.1016/0030-5073(75)90007-0

Sadri, G., & Robertson, I. T. (1993). Self‐efficacy and work‐related behaviour: A review and meta‐analysis. Applied Psychology: An International Review, 42(2), 139-152. https://doi.org/10.1111/j.1464-0597.1993.tb00728.x

Saleh, S. D., & Hosek, J. (1976). Job involvement: Concepts and measurements. Academy of Management Journal, 19(2), 213-224. https://doi.org/10.5465/255773

Sandmo, A. (2005). The theory of tax evasion: A retrospective view. National Tax Journal, 58(4), 643-663. https://doi.org/10.17310/ntj.2005.4.02

Schein, E. H., McKelvey, W. W., Peters, D. R., & Thomas, J. M. (1965). Career orientations and perceptions of rewarded activity in a research organization. Administrative Science Quarterly, 9(4), 333-349. https://doi.org/10.2307/2391030

Stajkovic, A. D., & Luthans, F. (1998). Self-efficacy and work-related performance: A meta-analysis. Psychological Bulletin, 124(2), 240-261. https://doi.org/10.1037/0033-2909.124.2.240

Stone, E. F., Mowday, R. T., & Porter, L. W. (1977). Higher order need strengths as moderators of the job scope–job satisfaction relationship. Journal of Applied Psychology, 62(4), 466-471. https://doi.org/10.1037/0021-9010.62.4.466

Tellegen, A., & Atkinson, G. (1974). Openness to absorbing and self-altering experiences (“absorption”), a trait related to hypnotic susceptibility. Journal of Abnormal Psychology, 83(3), 268-277. https://doi.org/10.1037/h0036681

Thornton, R. (1970). Organizational involvement and commitment to organization and profession. Administrative Science Quarterly, 15(4), 417-426. https://doi.org/10.2307/2391333

Treasury Inspector General for Tax Administration. (2011). Trends in criminal investigation’s enforcement activities showed improvements for fiscal year 2010, with gains in most performance indicators (2011-30-068). Washington, D.C.: Treasury Inspector General for Tax Administration.

Treasury Inspector General for Tax Administration. (2017, September 13). Declining resources have contributed to unfavorable trends in several key criminal investigation business results (2017-30-073). Washington, D.C.: Treasury Inspector General for Tax Administration.

Treasury Inspector General for Tax Administration. (2020a). Billions in potential taxes went unaddressed from unfiled returns and underreported income by taxpayers that received Form 1099-K income (2021-30-002). Washington, D.C.: Treasury Inspector General for Tax Administration.

Treasury Inspector General for Tax Administration. (2020b). Annual assessment of the Internal Revenue Service’s information technology program for fiscal year 2020 (2021-20-001). Washington, D.C.: Treasury Inspector General for Tax Administration.

Treasury Inspector General for Tax Administration. (2020c). Fiscal year 2021 biannual independent assessment of private collection agency performance. Washington, D.C.: Treasury Inspector General for Tax Administration.

United States Government Accountability Office. (2018a). Financial audit: IRS's fiscal years 2018 and 2017 financial statements. Washington, D.C.: United States Government Accountability Office.

United States Government Accountability Office (2018b). Information technology: IRS needs to take additional actions to address significant risks to tax processing (GAO-18-209). Washington, D.C.: United States Government Accountability Office.

United States Government Accountability Office. (2019). Tax debt collection contracts: IRS analysis could help improve program results and better protect taxpayers (GAO-19-193). Washington, D.C.: United States Government Accountability Office.

United States Government Accountability Office. (2020). Financial audit: IRS's FY 2020 and FY 2019 financial statements. Washington, D.C.: United States Government Accountability Office.

U.S. Department of the Treasury. (2005, July 28). Testimony of acting A/S Glaser on financing for the Iraqi insurgency [Press release]. https://home.treasury.gov/news/press-releases/js2658

Van Maanen, J. (1975). Police socialization: A longitudinal examination of job attitudes in an urban police department. Administrative Science Quarterly, 20(2), 207-228. https://doi.org/10.2307/2391695

Vroom, V. H. (1964). Work and motivation. New York, NY: Wiley.

Wallace, D. F. (2011). The pale king. New York, NY: Little, Brown and Company.

Walton, E. J. (2005). The persistence of bureaucracy: A meta-analysis of Weber’s model of bureaucratic control. Organization Studies, 26(4), 569-600. https://doi.org/10.1177/0170840605051481

Warren, R., Fogarty, T., Hartz, D., & Cola, P. (2022). A qualitative inquiry into mission creep at the criminal investigation division of the Internal Revenue Service. International Journal of Public Administration. Advance online publication. https://doi.org/10.1080/01900692.2022.2134420

West, M. A. (1987). A measure of role innovation at work. British Journal of Social Psychology, 26(1), 83-85. https://doi.org/10.1111/j.2044-8309.1987.tb00764.x

Wilson, J. Q. (1989). Bureaucracy: What government agencies do and why they do it. New York, NY: Basic Books.

Wongpinunwatana, N., & Panchoo, P. (2014). Creating self-efficacy in internal auditors for information technology audits: An on-the-job training perspective. International Journal of Management & Information Systems (IJMIS), 18(3), 213-222. https://doi.org/10.19030/ijmis.v18i3.8707

Wulfert, E., Greenway, D. E., Farkas, P., Hayes, S. C., & Dougher, M. J. (1994). Correlation between self‐reported rigidity and rule‐governed insensitivity to operant contingencies. Journal of Applied Behavior Analysis, 27(4), 659-671. https://doi.org/10.1901/jaba.1994.27-659

Zhao, J., Thurman, Q., & He, N. (1999). Sources of job satisfaction among police officers: A test of demographic and work environment models. Justice Quarterly, 16(1), 153-173. https://doi.org/10.1080/07418829900094091

Zuckerman, M., Eysenck, S. B., & Eysenck, H. J. (1978). Sensation seeking in England and America: Cross-cultural, age, and sex comparisons. Journal of Consulting and Clinical Psychology, 46(1), 139-149. https://doi.org/10.1037/0022-006X.46.1.139


  • There are currently no refbacks.

Copyright ©  Journal of Tax Administration. All rights reserved. | Hosted by Docuracy Ltd | Powered by Open Journal Systems