Jeremy Lundin was sentenced to 110 months in prison earlier this year and his wife, Alex Lundin, was sentenced to 24 months, as a result of federal charges against the Lake Minnetonka-area couple over more than $1 million they took from individual investors in a Ponzi scheme.
The IRS and federal prosecutors said they used the money to fund a lavish lifestyle.
The Lundins were among 38 Minnesotans indicted or sentenced for federal tax crimes, according to the 2018 annual report of the IRS. The average sentence was 45 months and restitution ordered was $11 million.
Nationally, IRS investigators involved in criminal cases identified $9.7 billion in tax fraud and $10.4 billion in financial-crime proceeds.
“The IRS Criminal Investigation Division in Minnesota has worked … to investigate and prosecute those who violate our tax system as evidenced by the investigations brought forward to the Department of Justice this year,” Gabriel Grchan, special agent in charge of the Chicago field office that oversees the Minnesota office, said in a prepared statement.
Vicki Petricka, a longtime IRS special agent based in St. Paul, said the purpose of the agency is to help people voluntarily file accurate returns.
About 70 percent of taxpayers in 2016, received a refund from the IRS of about $3,000.
The yawning federal budget deficit of nearly $800 billion last fiscal year is due to more spending and the recent corporate tax cuts. The IRS estimates the “tax gap,” at $450 billion-plus; what the U.S. Treasury loses annually from noncompliance and cheating.
Meanwhile, the Republican-led Congress has cut the IRS budget since 2010; from a high of $13.5 billion and 94,711 employees to $11.5 billion and 76,832 employees in fiscal 2017.
IRS compliance personnel, from call-center staffers to agents and investigators, bring in many times their salaries. The number of agents, audits and investigations is down. The number of angry taxpayers and tax preparers waiting longer to communicate with the IRS is up.
The complicated tax code is enacted by Congress. Not the IRS.
“Many times people simply make mistakes when filing their taxes,” Petricka said earlier this year. “The IRS understands and works with the individual or business. When individuals or businesses deliberately and knowingly do not comply with the tax law … IRS special agents work diligently to identify and bring to prosecution … those who evade taxes.”
The number of IRS investigators has declined from 3,500 in 1995 to about 2,200. There are fewer investigations.
The IRS criminal division has a 98 percent conviction rate on cases charged. Nearly 10 percent of individuals convicted incur a tax loss of at least $1.5 million.