Last week, IRS Criminal Investigation Division Chief Richard Weber announced the launch of a new unit dedicated to cybercrime that will draw from existing IRS criminal investigation agents as well as computer specialists.  The new unit will consist of approximately a dozen agents in the Washington, D.C. office that will work with other field offices across the country to develop cases.  The move signals the most recent addition to mounting government enforcement efforts to combat cybercrime and identity theft.

In a conference call with reporters, Weber attributed this development to interactions between the tax system and numerous high profile data breaches in the private sectors.  Those breaches have exposed data such as Social Security numbers, bank account numbers and W-2 information, which can be used by hackers to exploit IRS identity-theft filters and controls.  Earlier this year, the United States Government Accountability Office’s January 2015 report on “Identify Theft and Tax Fraud” identified a growing problem where fraudulent tax returns were filed, estimating that the IRS prevented $24.2 billion in fraudulent identity theft refunds during the 2013 tax filing season.  However, the IRS also estimated that it paid $5.8 billion in fraudulent tax returns.

According to Weber, the need for a more specialized cybercrime unit comes at a time when the IRS has undergone congressional budget cuts that have reduced its force of special agents down from 3,300 to 2,500, in the last few years alone.  In the fiscal year 2014, the IRS Criminal Investigation division conducted 4,297 investigations, including 1,063 related to identify theft.  To fill the growing need for cybercrime experts, the IRS is engaging in more cross-agency collaboration with experts from the Secret Service, the FBI, the Justice Department and the Department of Homeland Security to assist on the most significant data breach investigations.