The terms ‘white collar crime’ and ‘tax evasion’ have precariously vacillated from the perception or classification of bonafide crime, or non-criminal acts. The slippery slope of tax evasion in relation to white collar crime sustains serious implications, historically and to the present. According to expert sources at Cornell University Law School, the definition of white collar crime is explained by giving an overview of an early incident in 1939, when sociologist Edwin Sutherland “coined” the phrase. Sutherland defined white collar crime as an act involving “crime committed by a person” who is normally tremendously respected in their line of occupation, and social status (“White-Collar Crime”). This examination of the topic of tax evasion as relative to white collar crime frames the discussion in several components.
This discourse considers the antecedents of white collar crime, and explores a general historical development of the illegal ‘business’ and how it connects to tax evasion per se. The paper also explains some of the basic issues and problems confronting contemporary law enforcement, in combatting the white collar crime of income, or other types of tax evasion. Herein the discourse, the task is to describe the general structure of the white collar crime of tax evasion, as well as functions of law enforcement in the situation. These various aspects of law enforcement involvement are performed by local, state, and Federal law enforcement – as well as private security agencies in combating tax evasion. This investigation also includes a model of description of the complex manner that the interlocking, and various relationships existing between the public, the government, the police, and private security firms co-mingle in the fight to successfully mitigate tax evasion.
The Federal Bureau of Investigation, popularly known as the FBI, provides an excellent fertile source grounds to find a plethora of information regarding both white collar crime, and tax evasion. Among the primary antecedents of white collar crime, according to the FBI, were early incidents of white collar crimes in the early 1900s. Among these felonious criminal infractions were cases of White Slavery Act violations, transportation “over state lines for immoral purposes,” law breaking by evading “state laws,” and prominent scenarios of violations “involving national banking, bankruptcy, naturalization, antitrust, peonage, and land fraud” (“A Brief History of the FBI – Early Days (1910-1921)”). Therefore, obviously there were early incidents of wrongful bank tampering, insurance fraud, extortion, and so on.
Historical development of white collar crime as it relates to tax evasion can largely be traced to the famous case of notoriously charged mafia-crime boss, Al Capone. The specific reference to tax evasion as an official designation of ‘white collar’ crime emerged in this way. According to the Chicago History Museum (2014) archives, “In 1931, Capone was indicted for prominent tax fraud occurrences in the period of 1925-29. He was also charged with the misdemeanor of failing to file tax returns for the years 1928,” with government accusations charging him with “$215,080.48” in monetary claim owed (“Al Capone”). At this point, it is important to keep in mind the criminal charges of tax evasion as a white collar crime was against an individual. The reason why this distinction is crucial is because white collar crime has developed to entail a great deal of corporate abuse.
One reason is due to the global nature and ease of electronic communications. The key problem facing law enforcement personnel and agencies, is how intricate white collar crime is. Issues facing law enforcement officials pertain to the fact that tax evasion quite easily may be masked, or layered, underneath other white collar crimes. This is particularly true of any kind of fraud or scams, like timeshare scams, Internet scams, and corporate fraud. It is difficult because the criminal activity of tax evasion can (and does) cross international borders. Besides these basic problems confronting Federal, state, and local law enforcement officials it is important to learn about the general structure of tax evasion, as a white collar crime.
Generally the structure of a tax evasion violation will take the form of lying, cheating, or otherwise falsifying formation on tax reporting documents. One legal authority on the subject states individuals may hide “money” and its interest “in offshore accounts,” under report income, or similarly frame the structure as documented or position information as legitimate (“Tax evasion”). Tax fraud related theft or corporate embezzlement takes this particularly heinous white collar crime, to a whole new level. Tax evasion fluidly bridges the gap to many, if not all white collar crimes. Think about it. If a person or entity launders money, from illegal drug or gambling operations, the money must be ‘explained’ on paper (electronically) or reported somehow. So while the general structure of tax evasion takes the form of passing off documented records as legal, the trail to find the proverbial ‘smoking’ gun is elusive.
It is no secret that law enforcement functions performed by local, state, and Federal officials as well as private security agencies become pro-actively involved in tracking down tax evasion perpetrators. This pursuit, as one might imagine, is complex and can provide the basis for a lot of cross-jurisdictional teamwork and law enforcement cooperation. Since, according to Karson (2014), white collar crime also comprises activities of “both formal and informal organizations,” which often gain “influence over both criminal and civil legislation” law enforcement efforts represent the need for tireless training (“American Smuggling as White Collar Crime,” Introduction, paragraph 1). Their functions include getting a psychological foothold and understanding of how the minds of tax evasion criminals operate. Other key functions including law enforcement to use their own intelligence agents, and computer experts to investigate tax evasion fraud sometimes via wiretapping.
The Internal Revenue Service, also commonly known as the IRS, has much to say on the topic of tax evasion as a white collar crime. However in this section, and at this point, attention is turned to discussing specified functions by local, state, and Federal entities. According to the IRS, state and local law enforcement agencies operate its white collar crime, and (as related to) tax evasion crime, to their category called Public Corruption Crimes. It is very important to remember that this kind of white collar crime hurts people. Some have the mistaken notion that tax evasion or white collar crimes are victimless. The FBI believes otherwise. They state “It’s not a victimless crime. A single scam can destroy a company, devastate families by wiping out their life savings, or cost investors billions of dollars,” because today’s “fraud schemes are more sophisticated than ever,” and that they are dedicated to catching abusers (“Lying, cheating, and stealing”). The IRS further explain the issues involving state and local agencies.
The IRS characterize state, and local law enforcement as covering several activities, functions, and spheres of their Public Corruption Crimes division. They state “Public corruption investigations encompass a wide variety of criminal offenses including bribery episodes, white-collar-extortion, embezzlement cases, wrongdoing in illegal sorts of kickbacks, subsidy violations of gross fraud, bank suspicions of inconsistency, ridiculous tax actions of fraud, and “money laundering” (“Program and Emphasis Areas for IRS Criminal Investigation”). What happens in the spheres of local and state agencies is a utilization of their expertise while establishing investigations. This also reinforces their reputation as leaders “in the fight against corrupt public officials” (“Program and Emphasis Areas for IRS Criminal Investigation”). Although it is sad but true, public officials and law enforcement have been known to accept bribes, or otherwise become involved with white collar crimes.
In conclusion, it is apropos to describe the complex set of relationships that exist between the pubic, the government, the police, and private security agencies. As prior mentioned in this paper, local and state law enforcement often work together with Federal forces. And as the FBI informed, tax fraud as a white collar crime claims innocent victims. Identity theft is a big problem on the modern scene. These show basic ways in which the public is correlated into the complex set of relationships. Also, Beresford et al. (2005) state in one case involving the Los Angeles Police Department (L.A.P.D.) “more than $9.7 million in counterfeit merchandise was recovered” in a situation about counterfeit stickers which were supposed to have identified “that the tools had been inspected and certified” in terms of brand name power tools which were marked as “Makita, Black and Decker, and DeWalt” (p. 66). The fight continues for law enforcement to try and stay one step ahead of the white collar crime game of tax evasion.
All public and private law enforcement agencies are working together to stifle the progress of both direct, and in-direct criminal activities so associated.
References
Beresford, A.D., Desilets, C., Haantz, S., Kane, J., & Wall, A. (2005). INTELLECTUAL
PROPERTY AND WHITE-COLLAR CRIME: REPORT OF ISSUES, TRENDS, AND
PROBLEMS FOR FUTURE RESEARCH. Trends In Organized Crime, 8(4), 62-78.
Cornell University Law School. (2014). White-collar crime. [Data file]. Retrieved from
http://www.law.cornell.edu/wex/white-collar_crime
Cornell University Law School – Legal Information Institute. (2014). Tax evasion: an overview
[Data file]. Retrieved from http://www.law.cornell.edu/wex/tax_evasion
Chicago History Museum. (2014). Al Capone [Data file]. Retrieved from http://www.chicagohs.org/history/capone/cpn3a.html
Karson, L. (2014). American Smuggling as White Collar Crime [Kindle DX version]. Retrieved
The Federal Bureau of Investigation – FBI. (2014). White-Collar crime – Lying, cheating,
and stealing [Data file]. Retrieved from http://www.fbi.gov/about-us/investigate/white_collar/whitecollarcrime
The Federal Bureau of Investigation – FBI. (2014). A brief history of the FBI – Origins
(1908-1910) [Data file]. Retrieved from http://www.fbi.gov/about-us/history/brief-history
The Federal Bureau of Investigation – FBI. (2014). Famous cases & criminal [Data file].
Retrieved from http://www.fbi.gov/about-us/history/famous-cases/al-capone
Internal Revenue Service – IRS. (2014). Program and emphasis areas for IRS criminal
investigation [Data file]. Retrieved from http://www.irs.gov/uac/Program-and-Emphasis-Areas-for-IRS-Criminal-Investigation
