IT helps Treasury crack down on financial crime

The IRS is catching its own dishonest employees as well as outside fraudsters, thanks to sophisticated technology.

man pocketing money

The IRS is catching its own dishonest employees as well as outside fraudsters, thanks to sophisticated technology. (Stock image)

Improved IT solutions at the U.S. Department of Treasury help the agency to respond to external threats and help it keep track of the people who keep track of your tax dollars.

James Jackson, who heads the Department of Treasury's Electronic Crimes and Intelligence Division, explained how the agency's cadre of IT tools is helping it investigate and mitigate risks posed by "bad guys" on the outside -- and wayward employees from within.

Jackson's team, for instance, responds to threats made by members of the public -- 'tis the season for tax-distressed folks to start phoning in threats and mailing in letters laced in anthrax to the IRS, he said -- pulling in cross-referenced data on subjects and feeding it to federal agents who waste little time arresting culprits. It doesn't matter if threats come in via mail, e-mail or to one of the IRS' call centers -- IT systems track it all and record everything, Jackson said.

"It ends up in a crying session -- we're on their doorsteps in four hours," Jackson said. "It's a tough line. The (IRS) isn't the most liked agency in government." He spoke at an FCW executive briefing on waste, fraud and abuse in Washington, D.C. on March 28.

Because the Electronic Crimes and Intelligence Division is housed within the Department of Treasury's Office of Investigations, Treasury Inspector General for Tax Administration, it's also charged with policing close to 100,000 IRS employees who oversee $2.4 trillion in annual tax revenue.

These employees, Jackson said, are "given the keys to the kingdom," and while the vast majority behave with the utmost professionalism, there are always a few who try to take advantage of their positions. Some will attempt to embezzle funds either through their own accounts or accounts of associates, and there is also the potential for employees to attempt to profit from leaking taxpayer information to identify thieves.

But they get caught, Jackson said, because everything on Treasury systems is traceable, and transactions made by employees, no matter how seemingly benign, can be cross-referenced with a growing amount of other data. Data systems highlight potentially suspicious transactions -- like unauthorized access to a taxpayer's records or a shady tax return -- and link them back to those feds who commit fraud, where a case is built.

"The IRS has systems set up where anything that leaves the IRS domain, we can catch it, flag it, and send out leads," Jackson said.

Jackson said there really isn't a limit to the information that can be cross-referenced at that point: Zip code proximity, relationships to that individual, database checks from the Social Security Administration and other personnel records and even open-source or online databases like Facebook or www.classmates.com. GPS data, he added, can be used to build a case, corroborating interactions between suspects.

"When we're done with one of these investigations, we turn the files over, and we're basically saying, 'Here's the handcuffs, too, this person is ready to go to jail,'" Jackson said.

Jackson said over a single 12-month period "a couple years ago," internal investigations by his team ended with 53 federal employees charged with crimes, 66 resignations, 74 suspensions, 8 disciplines and 20 admonished.

"The bottom line is IRS employees know what they are not supposed to do, they have the keys to the kingdom," Jackson said. "We can't afford to have another Wikileaks. This kind of information isn't classified. But we can't disclose it."

After speaking at the briefing, Jackson told FCW that fraud detection at the Department of Treasury continues to grow in sophistication, catching more potentially criminal actions inside and outside the agency and increasing fraud deterrence. The cybercrimes and digital crimes teams engage in "worldwide manhunts" for the biggest fraudulent fish in the sea, and Jackson said agents aren't running around waving guns and flashing badges.

"They're behind desks analyzing logs, trying to find out how big this thing is," Jackson said. With continuously improving IT tools serving as a backbone to cybercrimes teams like those as the Department of Treasury, fraudsters have some reason to worry: If they don't improve their methods too, they'll be in big trouble.

"We've uncovered a bunch of activity in recent years, and when we get something, it's almost like a live wiretap we're doing, but a legal live wire tap," Jackson said. "You want us doing that. I wish I could tell you more, but I'd be giving away trade secrets. But we're on top of tax fraud."

X
This website uses cookies to enhance user experience and to analyze performance and traffic on our website. We also share information about your use of our site with our social media, advertising and analytics partners. Learn More / Do Not Sell My Personal Information
Accept Cookies
X
Cookie Preferences Cookie List

Do Not Sell My Personal Information

When you visit our website, we store cookies on your browser to collect information. The information collected might relate to you, your preferences or your device, and is mostly used to make the site work as you expect it to and to provide a more personalized web experience. However, you can choose not to allow certain types of cookies, which may impact your experience of the site and the services we are able to offer. Click on the different category headings to find out more and change our default settings according to your preference. You cannot opt-out of our First Party Strictly Necessary Cookies as they are deployed in order to ensure the proper functioning of our website (such as prompting the cookie banner and remembering your settings, to log into your account, to redirect you when you log out, etc.). For more information about the First and Third Party Cookies used please follow this link.

Allow All Cookies

Manage Consent Preferences

Strictly Necessary Cookies - Always Active

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data, Targeting & Social Media Cookies

Under the California Consumer Privacy Act, you have the right to opt-out of the sale of your personal information to third parties. These cookies collect information for analytics and to personalize your experience with targeted ads. You may exercise your right to opt out of the sale of personal information by using this toggle switch. If you opt out we will not be able to offer you personalised ads and will not hand over your personal information to any third parties. Additionally, you may contact our legal department for further clarification about your rights as a California consumer by using this Exercise My Rights link

If you have enabled privacy controls on your browser (such as a plugin), we have to take that as a valid request to opt-out. Therefore we would not be able to track your activity through the web. This may affect our ability to personalize ads according to your preferences.

Targeting cookies may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant adverts on other sites. They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies, you will experience less targeted advertising.

Social media cookies are set by a range of social media services that we have added to the site to enable you to share our content with your friends and networks. They are capable of tracking your browser across other sites and building up a profile of your interests. This may impact the content and messages you see on other websites you visit. If you do not allow these cookies you may not be able to use or see these sharing tools.

If you want to opt out of all of our lead reports and lists, please submit a privacy request at our Do Not Sell page.

Save Settings
Cookie Preferences Cookie List

Cookie List

A cookie is a small piece of data (text file) that a website – when visited by a user – asks your browser to store on your device in order to remember information about you, such as your language preference or login information. Those cookies are set by us and called first-party cookies. We also use third-party cookies – which are cookies from a domain different than the domain of the website you are visiting – for our advertising and marketing efforts. More specifically, we use cookies and other tracking technologies for the following purposes:

Strictly Necessary Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Functional Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Performance Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Social Media Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Targeting Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.