After nearly 30 years at the IRS, including three years as head of its criminal investigations division, you learn a thing or two. Don Fort decided to see how life looks from the private sector point of view. He’s now the director of investigations at the law firm Kostelanetz and Fink and joined Federal Drive with Tom Temin to discuss.
Insight by Confluent: Learn about how agencies are benefitting from that concept of data-in-motion to improve mission outcomes in this exclusive e-book.
Tom Temin: Mr. Fort, good to have you on.
Don Fort: Yeah, thanks. I appreciate the invitation Tom.
Tom Temin: So what makes someone decide at this point to go to the dark side here and represent he people used to go after?
Don Fort: We like to call it the gray side. So 29 years, I think a long time to do any job. And in some ways, it seems like it’s a really long time, but when I look back on it went really, really fast and really had an amazing 29 years, and just thought it was time for a change and really worked my way up from an entry level special agent to running the sixth largest enforcement agency in the US. So it’s kind of hard to top that. And really, after the top law enforcement job in the IRS, it was really ready for a change. And I think like a lot of people, this pandemic gives you maybe too much time to think about things. Have had plenty of time to think about it in my career, it’s typically been three or four years, really get the hang of the job, start to feel comfortable and ready for a new challenge. And I’m also a strong believer that organizations and agencies need new leadership periodically. And having been at the top for five or six years, it was really time for others to take charge.
Tom Temin: And just give us a sense of what a day in the life was like at head of criminal investigations. Everyone knows about it. But luckily, most Americans never encountered.
Don Fort: Yeah, hopefully you never have to encounter am IRS criminal investigation. It’s a 3000 person organization, the criminal division of the IRS. It’s an interesting setup, because it’s part of a 70,000 plus largely civil organization, many moving parts and the oversight that comes with any federal agency. And again, the delicate balance of being a major law enforcement agency inside of a civil organization. So I’d love to give you some exciting examples of busting down doors enraged and traveling the world in the interest of justice. But the vast majority of time was ensuring the agency was accomplishing its mission, which is really protecting the integrity of the tax system in the United States. But a lot of lobbying and jacking for resources and funds and assuring that the agency and the employees had everything that they needed to do their mission, interacting with the commissioner and other executives at the IRS and speaking publicly about the role of IRS criminal investigation. And pre pandemic, the most fun part of the job was traveling around the country, meeting the employees, hearing about the great investigations that are going on, and really kind of living vicariously through the agents and the work that they’re doing. Lots of meetings, lots of phone calls, and lots of strategy to try to get from point A to point B, which as most everybody knows, it’s barely a straight line.
Tom Temin: And lots of interagency work too. Every time I read one of those 2,000 word Justice Department press releases on a big bust or something, often you see IRS CI, criminal investigations, as part of the team, along with Justice.
Don Fort: Yeah, it’s a really interesting point, because the work that we do, and really any law enforcement agency, we’re the investigators and the fact finders, and we make those recommendations to the Department of Justice. But all of the cases that arise from investigation works are with the Justice Department.
Tom Temin: And what did you learn about human nature in all of this work, especially in the criminal investigations? Because I think people’s reaction to taxes, how they treat taxes, how they deal with the government, often reveals more than just their financial strategy, doesn’t it?
Don Fort: Yeah. I mean the mission and the jurisdiction that IRS criminal investigation has, you see kind of all ranges of humanity. You see about 70 plus percent of the work that we do is tax crime. So generally, white collar economic crime could be in any profession in any part of the world, but with the resources that we have really dealing with the folks that, this is not a mistake or an inadvertent omission, they had the intent to break the law, to get a leg up on the competition for whatever reason. So that’s the vast majority of work. Your listeners probably don’t realize is that the other 30% is that work, the high level money laundering cases, working the drug kingpins, a lot of cyber cryptocurrency work recently, some major takedowns in those particular areas. So it is kind of unique and that we see all ranges of humanity really in this job.
Tom Temin: And I wanted to ask about that idea of how do you know when something is just an inadvertent mistake, let’s face it, the tax code is easy to violate. I think Jimmy Carter as far back as his presidency, called it a disgrace to humanity. And of course, the IRS doesn’t write the code, you just have to enforce it, versus those that are out there to really steal money or tax evasion.
Don Fort: I kind of refer to it as a broad spectrum. On the one side, you have the hardened tax evaders. On the other side, you have the people that maybe made a mistake or made a math error or something on a return. And the difference, as you look at the deliberate tax evaders is, again, they had the intent to break the law. And the way that the system is designed in the United States, again, is that that an IRS criminal investigator will gather the facts, they’ll interview witnesses, they’ll interview the return preparing the CPA and build the case. And then you have to prove that the person had the intent. And you do that through various means documents and interviews, witness statements, and then it goes through many, many levels of review. And again, it has to clear many hurdles and get over to the Department of Justice, they have to do their own review and make the determination that, yes, this is a deliberate violation of the law. On the other end of the mistakes is really where I think the service in Internal Revenue Service comes in. I often think that if I had an issue with the IRS or my friends or families or co-workers, and you had a mistake, or an inadvertent issue on a tax return, you should be able to call and get somebody on the phone to deal with that. And there’s a lot of different mechanisms at the IRS, we are dealing with the 2,000 special agents that work for IRS criminal investigation are dealing with largely major tax evaders and corporations, individuals, small businesses, but there’s a very clear line that they deliberately intended to violate the law.
Tom Temin: And thinking about the division itself and the agency that you came up through. It’s smaller than it was 10 or 15 years ago, did you feel that you had the adequate resources for the various jobs when you were doing them throughout those years?
Don Fort: That’s a great question. And if you’d asked me two months ago, I wouldn’t have been able to answer but now that I’m not with a government anymore, the blunt answer really is no. I mean, the IRS overall is grossly underfunded. And again, I just made that point about the name service in the Internal Revenue Service, people should be able to call like you call a private business and get somebody on the phone. And there’s so many competing priorities that there just isn’t a possibility right now. As far as CI, yeah, I started in 1991. So in the mid 90s, there were over 3500, special agents, now there are roughly 2000. Population has exploded since then, and think just about the technology that’s changed since then. So the world has gotten much more sophisticated. The world has gotten smaller and your ability to send money around the world with a click of a button or with your phone. So it’s much more sophisticated financial transactions, yet the staffing is down radically.
Tom Temin: And in those years, did you have a favorite commissioner?
Want to stay up to date with the latest federal news and information from all your devices? Download the revamped Federal News Network app
Don Fort: Well, when I was the chief, the last three years, I had a lot of dealings with the commissioner. Prior to that agents and supervisors don’t have much dealings with the commissioner. But these last two commissioners, I have to say, have been incredibly approachable down to earth, and very supportive of the IRS mission and really the CI mission.
Tom Temin: And what will you do now as director of investigations at a law firm I guess that specializes in tax cases.
Don Fort: It’s a boutique law firm, and it does a lot of work in civil and criminal tax controversy, all types of litigation. And so I will be working essentially on the other side in certain tax matters. But again, when you think about the way that the justice system works in the US, the side that I was on working for the government is gathering facts to try to see if there was enough evidence to prove a tax violation — on the side that I’m at now is trying to gather facts to see if there’s enough evidence to prove that there isn’t a violation. So just kind of different sides of that equation. But also looking to expand business into some anti money laundering areas and monitor ships and internal investigations. But a fantastic firm that have been, you know, associated with for many years. I’m really looking forward to seeing if I can prove myself now on on the outside.
Tom Temin: And just a final question on detail here. I imagine in the whole money laundering scheme, the cryptocurrency phenomenon must be changing the game in really odd ways.
Don Fort: It is the latest evolution in the movement of money. If you think about 50 years ago, and you you couldn’t wire transfer money. So it’s just really the latest transformation and how money moves. How you document and build a case basically stays the same. But yeah, it adds complexity. So you’ve seen a lot of these big cryptocurrency cases that people have heard of, cases like Silk Road and AlphaBay — and more recently the Twitter hack, the child exploitation case, the terrorist financing case that was just brought — those are IRS cases and they were largely solved through following the money. And our expertise really to track and trace that money again adds a level of complexity with the cryptocurrency, but I think they’re proven they can get it done. And I think the next wave is those that are using cryptocurrency in some way to evade their taxes.
Tom Temin: Don Fort is director of investigations at the law firm Kostelanetz and Finktsin and former chief of the IRS criminal investigations division. Thanks so much for joining me.
Don Fort: Thanks. I appreciate it Tom.