Where did the money come from, and where did it go – that’s the question forensic accountants work to answer. Robert Nordlander spent more than 20 years at the IRS as a special agent in forensic accounting working to uncover massive levels of fraud. In this episode, hear his most interesting stories from his experience following the money.
Robert Nordlander is a CPA and CFE with over 20 years of experience as a special agent with IRS-Criminal Investigation. During his time with the IRS, Robert investigated federal tax crimes and money laundering around the world. Currently, Robert is the principal member of Nordlander CPA, PLLC, a boutique forensic accounting firm specializing in forensic accounting to solve tax problems.
You can also find Robert on his podcast: Fraud Fighter.
Where did the money come from, and where did it go – that’s the question forensic accountants work to answer. Robert Nordlander spent more than 20 years at the IRS as a special agent in forensic accounting working to uncover massive levels of fraud. In this episode, hear his most interesting stories from his experience following the money.
Robert Nordlander is a CPA and CFE with over 20 years of experience as a special agent with IRS-Criminal Investigation. During his time with the IRS, Robert investigated federal tax crimes and money laundering around the world. Currently, Robert is the principal member of Nordlander CPA, PLLC, a boutique forensic accounting firm specializing in forensic accounting to solve tax problems.
You can also find Robert on his podcast: Fraud Fighter.
Hi, we're here for the latest episode of Let's Talk fin crime with Robert Nordland. Welcome to Let's Talk fin crime, the show where we explore the human side of financial crime. We cover not only the big industry trends, but how you can truly protect yourself and your assets. I'm your host Paul Kotick and one of the hosts of the nice atomized let's talk in crime series. I'm in the financial markets compliance business at nice and I'm based in New York. My career started in trading and sales in financial markets before I became a compliance officer so poacher turned gamekeeper. I've worked in Sydney, London, Singapore and now New York. So I can tell you, there are bad actors everywhere. Today, we're thrilled. Our guest today is Robert Nord, lander. And, Robert, it's great to be speaking with you, Robert, a CPA and a forensic accountant with years of experience at the IRS chasing down bad guys. I'll let Robert explain what a forensic accounting is and what they do. But suffice it for me to say that they're quiet. They're quiet, diligent work uncovers massive levels of fraud. Robert, thanks for joining us. It's good to be here. Thank you for having me, Paul. So let's kick off. I really want to find out what a forensic accountant is. We've all we've all seen forensics referred to in TV shows like cis and so on, but presumably, hopefully, you're not looking at corpses or bookcases. So can you describe what a forensic accountant is? And how you became one? Or how does one become a forensic accountant as opposed to? What's the difference between forensic accountant and say, just a regular CPA? I know you aren't you are a CPA. But what? How do you become a forensic accountant per se? Forensic Accounting is really, for court purposes. That's really all it is. It's somebody that is qualified to go into court and to articulate where did the money come from? Where did money go to? That's really all it is. Anybody with a background in accounting can become a forensic accountant or forensic examiner, it's just a matter of getting a little bit of special skill sets to articulate to a jury to a judge to defense attorneys and prosecutors, what's happening, and understanding the rules of evidence and how things work in court. That's really all forensic printing accounting is how to become one, there's no straight road to become one honestly. It's mostly by experience. For example, I don't know of any degree out there says come over here to my college for four years, you can get a degree in forensic accountants, there may be something out there, but that's not usually how it works. It usually works, go get an accounting degree, then probably get a CPA license, get some credentials underneath your belt, maybe an MBA that type of stuff, and then get experience about following the money, whether it's an embezzlement, whether it is some type of partner partnership dispute, maybe there's an economic damages where a rental house was, was they caught on fire, and for four months, there's no rent, well, how do you calculate the rent, you know, that type of thing? Is, is what's needed. So it's an individual that can go into court and says, Your Honor, this is what I say this is what's done. And many times they do report, but what's key with the forensic accounting is at the end of the day, somebody has to testify to what's going on, which means you got to have the character, you can't have a criminal history, of course, because if you do, they're going to the other side is going to go after you because of that, number one. Number two, you got to have the credentials that the court say it's okay. That we believe what you're saying. And we believe that you have the experience and the credentials to say what you're saying. You just can't take your next door neighbor who has a bookkeeping degree and say, Your Honor, I'm bringing my next door neighbor to court here. And they can tell you what's going on. They may be to have the same level of intelligence as a forensic accountant. The forensic accountant has to have the, what I call street cred or credentials in court, and they'll then then it becomes blessed. But ultimately, the gatekeeper at the end of the day is gonna be the judge, the judge is going to determine whether or not what you say is worthy of hearing. That's really interesting. So I guess, you know, I think you worked at the IRS. I understand that, you know, some of the accounting firms, you know, the big accounting firms and so on have had forensic accounting departments. What other sort of, I guess, looking at looking on the government side, aside from the IRS, what other sort of, I guess law enforcement agencies or Where else would would one find? You don't normally think of accountants being part of the law enforcement community? Or at least I don't until I met you. But it sounds like forensic accountants. Yeah. You mentioned going into court and so on. So it sounds like a forensic accounting capability is is part of the modern day law enforcement suite. So what are the what other sort of regulators and law enforcement agencies would have forensic accountants? Obviously, the IRS is an obvious one, you know, follow the money, you know, who's not paying their tax and so on. But to forensic accountants crop up elsewhere? They do yes. And they pop up in the government as well as in the private sector as well. For example, most of your crimes out there are crimes of greed. They're not crimes of passion. Right? street cop goes out there, he pulls over a car even speeding, there's some type of interaction that gave me a ticket to go on your way. Yep. Or someone calls 911 helped me my spouse is beating up on me or my next door neighbor's beating up on me. Come save my day street cops shows up and kind of like, finds out who to arrest and they put them in jail. Right. And usually, those are usually crimes of passion. And that type of thing. I don't like to I hate blood to the head kind of thing. Exactly. That's, that's that's a lot of that stuff. But most of your crimes out there are greed related the drugs, greed related, I want the money. Prostitution, you know, pimpin, you know, human trafficking, I want the money, tax evasion, I want the money. We talk about wire fraud, these romance schemes, I want the money, right? Well, in those situations, the person to be able to track that money, where did it come from, and where did it go to is very, very important. And that takes a certain skill set. You can take an accountant and become a cop, but you can't take a cop to become an accountant. That's really what it comes down to. So there are forensic accountants out there in every agency in are becoming more and more prevalent, because the the various federal agencies internationally, understand that it's all greed related. In order to do that, you got to follow the money, you got to have a basic understanding of income out go bank accounts, how to trace money, how assets are purchased, how things are hidden. Those types of skills that are needed in order to take down these big organizations, that really even organized gangs have a financial aspect to it, it's all non power and money. So forensic counts are out there. The IRS, in my opinion, when it comes to criminal investigations has got the best because that's all they do is forensic accounting type of work, tax evasion and money laundering, those types of things. And that's who they hire, you have to have, they have to hire someone with accounting background, you go into the FBI, you can become a forensic accountant. It's true, but you may have a psychology degree. Now, that's going to take a little bit of a learning curve, to go from somebody who maybe is very good at speaking Russian or Spanish or whatever else are doing. And tournament friends account. It's not gonna it's it's a long learning curve right there. It's pretty steep. But with the IRS, it's not as steep because they're already hiring people with that background to begin with, in some of maybe have CPAs CPA licenses. So the DEA, the Drug Enforcement Agency, they have frozen accountants, Secret Service has it every was every government agency has some type of, I would say accounting nerd in the background, looking at records. But with the IRS Criminal Investigation side, they're typically used by the US Attorney's Office, the federal prosecutors, in a huge way, because they know that that agency by itself knows her stuff, because that's all they do is forensic accounting. So they'll almost every huge press release regarding fraud and money laundering. It's going to it's, I guess my guarantee is going to have IRS somehow in the background, and at least interesting. Well, yeah, okay, my next question was actually only we started to touch on this, I had two questions that I was going to come to next and one one is, who were the bad actors that you that you went after, when you're at the IRS, you know, where are they and how do they operate? But also, how does an investigation start? I think the two are related. You've started to touch on this. So can we go into go into that a little, I guess, in that order, who are the bad actors is there you know, is there a is there a is there a fingerprint? Is there a particular thing you're looking for it could be anyone you know, you're walking down the street who's could you just sort of say, well, that guy looks like a bad actor or that person over there in a suit looks like a bad eka. And have you started investigation? Did you say do you just look at someone and be my are they driving that Ferrari and follow them? There there is no profile. There's no profile where someone's got a certain look therefore they are either a money launderer or tax evader. It runs the gamut. It's It's in every neighborhood. Every type of social economic what's what word I'm looking for social or economic? Class? Okay. Yep. It could be anywhere. Now. I can only speak with IRS criminal investigations. With that job, they have criteria in which you are evaluated. One of the evaluate what are the criteria to evaluate and what actually are a good one or bad one or you know, what you rank and whether or not you get a small raise or bonus in your paycheck? is one of the things is, can you have an with a call an inventory, which means a caseload? That is self sustaining? Are you putting your own stuff on the plate or somebody coming in saying here's occasionally work on because you're not working very hard. As long as you kept yourself busy, they left you alone. So you're responsible for go out and find your cases. And in that situation, it was however, your I guess, right, when we were prices, whatever you thought of, he could think of doing to find a bad actor, they would allow you to do it. For the most part. I'll give an example. I know that people who commit tax evasion typically have have money, right? They tax evasion, because you have money. Well, there's a there's at one time I went to various counties in my, in my area, and I said, give me a list of all the houses over a million dollars that were purchased in the last two or three years. And I get a list of all the million dollar houses now million dollar house in where my neighborhood is at. It's a big house. Now San Francisco, that'd be probably a small house, but in my house is million dollars. And there's not that many Oh. And so I would take that debt, they take that list of all this houses that are purchased, find out who purchased them. And that would give it to the our assistant and say, Okay, pull the tax returns of every single one of these people who bought this house, in figure and just briefly put their income in there for last three years, and then sort it from lowest to highest. And so what I ended up was the first two or three lines of my spreadsheet, were potential tax evaders, because if someone's making $10,000, a year, in this recently purchased a million dollar house, that does not make sense, right? So that's what you call an aha moment going, Oh, this doesn't look right. Let's dig a little deeper. And that's one way of doing it. Another way is an example there, there are neighborhoods. And I know this happens quite often, they are neighborhoods, certain zip codes, right, that were rich people live in. And they live these neighborhoods. And if you ran if you did a database search of give me a list of all people that made less than $30,000 a year in his neighborhood, they you can get a list, right? And if not list you can go and figure out whether or not this is worthy of your attention to to to go after. So you got that you also had the federal prosecutors will come get your cases. Once they know how you know, you know what you're doing, they'll give you more a lot more work than what you need. You've got also the situation of informants coming in one spouse mad at the other he you know, been evading taxes for years. I know about it. I'm gonna turn them in, you get that type of thing. There's plenty of things that you can that you can look at. It is not a matter of is that a deep dive in some situations most of the time, if you see an example, you see someone to drive around in a fancy car, I got a you got a tag on it, you pull the tag, find out who owns it, you run attacks, you turn on it. If it's reasonable, the person makes a quarter million dollars a year and grabs a Ferrari. Can you do that? Yeah, probably. It's you know, it gets in the trash. So in the five minute Look, we're not talking about invading someone's privacy to the point where it's egregious. It's just a five minute look on App. No update. No, thank you. What you're doing is looking for low hanging fruit, sort of low hanging fruit. So cash flow coming through you mentioned that's how you get paid. I didn't know the IRS paid bonuses. Trust me, it's not worth the hassle. It's really not like maybe what 3% Something like that Max, maybe 1%. So if you made $100,000 You get 1000 bucks. I don't know if I want to work really hard for an extra 100 hours a month but to some people they may you know but that's It works. Yeah. So okay, so I think you're asked the question where you who are the bad actors? It sounds like it can be anyone as you say motivated by greed. So I guess anyone who just needs arms gonna try it on or having a bad day at the, you know, bad day at the casino or something and yes, because it the it's money related. So it can be you can be from the very poorest neighborhoods Believe it or not where they commit fraud in order to earn more money or good base, but just the the multi billionaire who's trying to hide money overseas, they want to pay taxes on it. Now we're not talking about whether it's a crime. The question is how big the crime is. That's what they'll do. Yeah. And there's, there's a, there's an element of, is it worth my time? You know, the iris is once you go after $2 of tax evasion. Does it make sense? But the 2 million Yeah, yeah. Yeah, for sure. Okay, so So I guess, the Yeah, I was I was gonna a question I was gonna ask a little later on, to talk about how does it How does A have someone come on your radar, but I think we've we've started to have a look, let's come back to that in a little while. So my, my second question there was, was have investigations start it. So you've gone out and you've pulled these, you've pulled these records of people in the district of big houses or someone driving, you pull the tag on someone driving a Ferrari and so how do you? What makes you then go, you know, I want to I want to take this further. Is it just that, hey, the person's only earning, you know, they're driving a Ferrari and they're earning, you know, tax, they're only declaring on their 1040. And he declaring 25 grand a year or something? I mean, they might have, they might have one, you know, they might have been left some money by by the, you know, great artillery or something. That's true. Yeah, that's absolutely true. That's one thing that that we always understand that there could be legitimate reasons for what they're doing. Absolutely. Could be legitimate reasons. It's just a matter of, let's look into it and see what happens. And we it, let's assume you open up a case you look at it, it doesn't look right. guy drives around a fancy car or makes $20,000 a year lives in a fancy house. He appears to be not the son, right, who maybe daddy's paying for the party, you know, legitimate adult with maybe two kids and you know, a spouse that type thing. Well, then he was hit and say, Okay, what kind of businesses a year z w two employee is he self employed, that type of thing. And, you know, you may find out hey, there's something here, in the first step that you post you're supposed to do, is to go knock on the door to give them a chance to explain what happened. If they sit there and say, Hey, I inherited the million, you know, a couple million dollars for my, you know, old aunt when she died. Okay, well, when did she die? And how much you give you? Well, she died last year gave me X dollars. Well, that'd be pretty simple to find out. Whether or not that happened. I have never, in my 20 Plus career, had some legitime give me an answer. It's always been no one, no one inherits wealth. It's very, very rare. And they do, they typically come from a wealthy family to where they had a forehand, or it assumed they got a they won the lottery, well, there's going to be a record that there's a lottery winning, but they're gonna pay tax on it. So there's some type of thing out there. In addition, when you look go back a couple of years on these cases, you can find out pretty soon about whether or not someone's actually living off investments. For example, someone's got$20,000 A year right but it's all interest income. Well, you know the interest rates are very very low so $20,000 a year you know, divided by what point half a percent a lot of money be sitting out there so a lot of times it's just people hiding money. I haven't found anybody yet who had a legitimate excuse about what they did. So okay, so that the tax fraud in itself or that you know, the dodging the tax itself is a crime but it sounds like okay, I guess two things here firstly, let's let's say there's someone out there who had money impugning any any profession at all, but let's say someone you know, earns a lot of cash in what they do. There are lots of lots of occupations out there where cash is cash changes hands like and so someone either reports or someone under Reports their tips or does jobs work for cash or something but what they are actually doing is perfectly legal perfectly upfront, you know, in terms of the the occupation you're perfectly fine, not a problem. But it sounds like as well there's no doubt a class of another class of person out there who's who's tried to deliberately try to hide something else. So they not only are they under reporting the income of it, God but that income is is gained through nefarious means, as you mentioned, I think you mentioned arms trafficking before human trafficking and so on or drugs and so on. So does that then? Yeah. So so if you're at the IRS and you look into this person with a big house and a fancy car and so on, and you know, they're not really declaring much on their on the W two. Can you then hand that over to if even if you don't know what they're potentially involved in? Where does it go from there, you give it to the local FBI and say, hey, look, you know, this guy just doesn't earn enough money to be affording this. Not even, not even close, not even close. If I find me a whale like this, I'm not giving anybody I'm gonna find out what's going on. This is my baby, I found it's my baby, I want to work it out, run it into the ground. For the most part, it's it's not that complicated. But the guys that let's say, the guy's a construction owner of a construction business. Well, that's probably where the money came from his construction business. And then what you would do that you would do, you would go ahead and in get the bank accounts, find out where the money is coming from, is the money coming from cash is the money coming from, you know, is the commercial real estate rental real estate, I mean, what type of real estate is the end? What kind of constructions in is doing mining as he doing it, there's gonna be some source of income. Now, on occasions, he will find that some people have ants usually obvious, there's a lot of cash in the caches. Unusual, I'll give an example of unusual, it's $20,000 deposits all at one time. Well, no one cares around $20,000 in deposits at one time, if they do, it's just kind of weird, right? But the guy is, let's say he's in the is the same. He's an investment advisor, on paper as an investment advisor. He's got a couple of clients here and there, but a lot of cash coming in a lot of cash paying for cars. Well, that's a problem. Because legitimate investment, investment advisors don't take cash like this, don't. And so then you start figuring out, so I do surveillance on this, who are his current customers? What else can I know about him? In in many times, I know one case I had, it was ultimately he was into prostitution, that I could narrow it down, or it was from, or it's from drugs. And when I started looking into it, I found out that these individuals were buying a lot of real estate houses in the middle of nowhere. And when you start looking at these things, that houses in that being similar in nature, about what they were doing with it in the power bills, in fact, they had a marijuana grow operation that probably had four or five to six houses. And that's what a source of cash was from, it was kind of It wasn't difficult. Because, you know, it's just common sense, which kind of you had to narrow it down. Now, in that situation, I would have to determine whether or not there needs to be another agency involved. If I need to have an ad to prove the underlying offense, like the drug trafficking, that type of thing. You've already proven but the most architectural part, you've got to be caught for that almost. Right, right, exactly. So the question would be is okay, do I wonder the agency because there's pros and cons with that pros has is you may have somebody has a greater expertise, the con is, you may have somebody who's under the authority of somebody else. So if you're going to if you're going to hold hands with other agency, you better be prepared to deal with the agency's garbage regarding their their oversight, management, that type of thing, because you may have a guy so yeah, I'll help you out. And then and then wait, the guys on some temporary duty assignment in, you know, an Africa. Well, you know, now your partner's got just left, and you open yourself to say, Hey, I wanted he to help me. They said, Yeah, to help, but also they changed the resources on you. And now you're stuck. So, you know, I was very reluctant to bring another agency unless a really, really had to, because for the most part, I had them dead, the rights from the tax evasion side of things, right, for the most part, so you don't analyze the tech, you finalize the tax evasion part and get, you know, get input, and then we can go worry about to go work. Yeah, they wouldn't go worry about the other stuff later. Yeah, it's because the drug trafficking is probably not as complicated to prove, but the tax evasion takes a little while. Right? Because the you have to do a deep dive into income. Money, on one hand is another Well, yeah, money going from one hand to another, it's not illegal. It's the intent and the purpose behind the money transfer from one person to another. That's the part and so you have to figure out the intent and that's reason why it takes a little longer. And I guess if someone's running drugs, you know, you're right, their house and they've got, you know, stacks of cocaine or something. It's pretty, it's pretty obvious but but, you know, financial flows can be can be hidden unless they got, you know, hundreds of 1000s of dollars stashed in the in the in the cupboard next to the bags of cocaine or something. Let's just take a quick break here. We do need to let our sponsors have a short say. So let's just take a short break and we'll be back in a moment with all stories from Robert Nordland up interested in hearing more about the latest trends in fighting financial crime, visit nice ACTA Mize comm slash events, dash and dash webinars to Learn more today. Once again, that's nice act demise.com/events-and-webinars. We're back with Robert Nordland are a true leader in the field of forensic accounting and listening to some some really interesting stories from from his many years as an IRS forensic accountant. Robert, I guess just getting down into the weeds a little further. You know, Kenny, we've touched on a couple of these points. Can you like give us an idea? Like, what is tax fraud? Are we just talking like I mentioned before? Are we just talking about someone maybe under reporting their tips or doing some jobs for cash? Or? Or is it bigger? You know, does it go further than just dodging a bit of text? And I guess, what would be the threshold to have to come on to your radar or the radar of one of your colleagues? All right, good question. The issue is, is this tax fraud is a very broad category is sort of like saying the word construction. Well, I mean, you got drywall, you got flooring, you've got asphalt, you got roofing, you know, it's kind of a general catch all type of category. Most of your tax fraud cases are in about three buckets. One of them is tax evasion, which means they earned the money and they didn't pay tax on it. That's what another one is the IRS says the Oh buddy in the IRS is trying to collect the money and they're hiding it. Okay, that's that's kind of like the general bucket of tax evasion. You also have another another category of filing a false tax return, which means that the tax return is materially false, which means, which means materially means it could make the IRS decision making different if it knew the truth, that's really what it is, is it has to be false to materialize. Those tax evasion and fall like filing a false tax returns are the really two main prongs, then you also have a third one which is very big. It is unpaid payroll taxes. Now what it is, is that the IRS says it's you if you have an employee, you must withhold employee withholdings out of someone's paychecks and turn it over to the government. In many cases, they get the the businesses withhold the employees from employees checks. They don't turn it over. The question is that where do they go to in so you have the abatement of assessment, which, you know, they shouldn't owed but didn't pay. You have the evasion, payment which they owed money, but they didn't pay. And then you have a false tax returns. And then you also have the unpaid payroll taxes. None of these statutes, federal statutes have $1 limit to them. So technically, if you evaded a$1 That's a crime. So now it's a question of whether it's still right. Which restaurant waitress not fooling paying taxes on this on a couple tips all the way to the billionaire of sending money overseas, try to hide things. It's all the same crime now. It's a matter of how much okay, yeah, yeah, the scale of it. Now, the federal guidelines is a book that all judges are must consider as advisory, in order to make the crimes. The punishment similar across the United States, the courts have adopted what they call the federal sentencing guidelines. And what they do is they take this they take what happened they put into a little formula, and the formula is generally based on the amount of money that was stolen or made it so as you probably can see, a million dollars is going to give you let's say 36 months, but 100,000 is going to give you 18 months, it may be 40,000 is going to give you six months, okay? The IRS is in the business of putting a fear of God in people when they do press releases, you're not going to do a press release going, Hey, he invaded all this money and he got probation, that's not a press release, you're going to see, okay, they're not gonna, they're not gonna do a press release on that. They don't want the general public to know this. So they have a general idea in every state slightly different, but they have a general idea of what makes a good case that's going to be worthy of publicity, to where when people read this going, Yeah, that's right, they should be evading taxes, I gotta pay my taxes, they gotta pay their taxes, they went to prison for 18 months, I'm not gonna go to prison for 18 months. I mean, that's the coppice thing that they're looking at, right. So it's usually around, I'd say about 80 $100,000, somewhere on there on the federal sentencing guidelines, that kind of separates between a year in over a year, anything less than a year, you get probation or get less time, anything over a year, is usually active time. But the judge does not have to take this manual or the sentencing guidelines. at all, it has been advisory. In many times the judges follow it, but sometimes a deviate from it. Because they're judges, they can do whatever you want to do. But the purpose of the guidelines was to make sure to the person that de Moines, Iowa was getting the same sentence as the person in New York City as a person in Miami. So in theory, the guide the Moines, Iowa, you know, still a million versus New York, still a million should get the same time. In theory, they do No. Good to someone. I've never been to the great state of Iowa. So I can't I can't comment on what it's like out there. But you know, just sort of my thinking of the cost of real estate for examples, you know, to use your example, before you probably get a large house in Des Moines for a million bucks. Whereas in New York, you'd like to get a, you know, an apartment. So I guess what I'm getting at is, is is that level playing field actually? Should it be level? Should? Should? Should it more be? I guess, I guess we're getting a little subjective view, but the amount that it would change your life in a location with, you know, with somebody? That's a good question. Yeah, that's a good question. And, in ultimately, the federal prosecutors, and the judges know this, and they live in that neighborhood, they know approximately what it should be like. And, as an agency, as an agent, you kind of know, what's what the good feel of, of where this case will go. So I just gave an example, New York probably has a higher threshold of what they'll take New York agents than it would be in Des Moines, Iowa, or, you know, and you know, and might say, maybe St. Louis or LA, there, there's gonna be a slight difference in what they're looking at. It's because the judges are not going to take a $40,000 case, as per as, as seriously as you know, somewhere in the middle of nowhere. But yeah, but you got the basis, here's the key at the end of the day, Paul, you've got to have cases that touches every neighborhood, if people in Des Moines, Iowa know that they can get away with tax evasion, they're not gonna pay taxes, if all the all the cases gonna go to New York, while actually pay taxes, so you cannot touch every neighborhood out there. So everybody understands that you too can be caught. So, you know, it's fair for an agent to sit there and say, you can only do a million dollar case, you know, a little find a million dollar cases in a many neighborhoods. No, you're not gonna find it. But in New York, and Miami and San Francisco and LA, and maybe he's doing a Dallas, the billion dollar cases are probably out there. So I think the guys in the in the southern district in New York and the prosecutor's office in the Southern District of New York probably get, you know, they look at you know, 100,000 gun, whatever, because they've seen that sort of thing come across after a while you get used to it going here. So what? Fair enough. So look, I just want to be respectful of your time. But but we've touched on the sort of quantum and you mentioned, there's no statutory de minimis and I get that. So what's the scale of the problem here on it, I guess, on a national level, you know, how much how much tax fraud is that? I'm not talking about tax evasion. I'm using the words carefully. That's tax evasion being a subset how much tax fraud is there out there? Now, What's it costing the federal government? What's it costing the honest taxpayer? There is something called what they call the IRS calls the tax gap gap tax gap. That tax gap is the difference between what is reported in what should be reported. They call it tax gap. No one really knows what that task app is. They can only do a scientific wild guess. And depending on who you talk to it, I know for sure it's in the billions That's an approps in the billions. I think the commissioner recently said it's$1 trillion. I don't know that that's the answer, not for sure. It's in the billions, probably in the hundreds of billions dollars. Wow. It's what it is. Some of it federal budget. That's true. Some of it is what we consider, like we said, you know, not turning over the payroll taxes. Some of it just may be a business going under and just can't make the payroll taxes it just went under isn't a crime. Yes, we're gonna prosecute it. No, it should have happened. No, but you know, it does happen. That's just what I'm getting at it from Yeah. Yeah, he just it just just part of life. Some of it actually is, you know, the people who I'm not gonna pay the payroll taxes, I will take this money number, send my kids to all the private schools and live in a big house with a fancy fancy card and have all this type of stuff. And then, you know, in the for they would be prime pickins. For for a federal prosecution. There was a jury appeals. They're both committed crime. One of them had a what was me, the other one is, you know, screw you have to pay taxes. Yeah. But they think it's in the hundreds of billions. Maybe in one, you know, like I said, the Commissioner thought probably thinks that took maybe a trillion dollars, but it's a lot per year. That's, that's not that's amazing. But that's, that's a big chunk of the federal budget. Well, the federal budget is in the trillions. I'm not sure 15 trillion. I'm not sure exactly how big it is. But the but the fact of the matter is, there's a lot of money out there. It's not necessarily all the evil rich people that some people think it is, in some ways, believe it or not, some of the poorest communities can make commit the largest tax fraud you ever see. Wow. Because the IRS, based upon the statute, Congress gives the called an earned income tax credit, the housing credits, dependent credits, all those credits are money that's shoved out the door, if you qualify, and it is a huge problem for return preparers in his in these social, economic, depressed areas, to falsify tax returns to get a $5,000 refund when the person's when probably do maybe 600. All refund. Now $600 versus 5000, that's a lot of money, right? You multiply that times 10, or 1000, or 100. That's a lot of money. So you've got a small business owner, who's a construction worker, let's assume he's evading $50,000 in taxes, so that's a lot. That's a lot of income to be able to have$1,000 in taxes, like a quarter million dollars, well, quarter million dollars is nothing, if you're losing $5,000 For every return has been filed, and some of these neighborhoods, okay, so that's really where the big money that honestly is the false ash returns, it's not necessarily the business owner has actually tried to evade taxes. And that's really interesting flavor. And believe it or not, Congress has created its own problem. So when you start giving out free money, you people give free money, you get free money, or someone's gonna want to dig it is gonna dig a ditch, and then try to bait taxes. You know, it's much easier. Yeah. It's not, I guess, I guess, you know, people are rational actors at the end of the day in that respect. So again, I just want to be respectful of your time. So we're kind of drawing to the close of the episode here. But I guess, just very quickly, revisiting how your investigation start. You know, I mentioned I asked before, and you mentioned how, you know, there is there is a degree of interoperability between the IRS and other enforcement agencies. But I guess one other question is, how were to what extent are authorities such as the IRS dependent upon you mentioned that you there's an incentive for investigators to go and sort of catch and catch and kill your own cases and so on. But is there any dependency on the person in the street reporting unusual goings on? I mean, I'm not saying that we should become a nation of curtain twitches, and you know, would hate others prying on everyone else. But when should we be a bit on guard? I guess to put that more bluntly, does the IRS receive a lot of tip offs from from regular people? The answer is yes. But just realize it's a government agency. You put that stuff in there somehow a black hole more than likely you'll never see it again and nothing probably ever be worked. They cannot work every case that comes in the door. It doesn't happen. There's enough manpower to do all that. It doesn't work. The best way to do this type of thing is to put the fear of God people to they straighten up and do the right thing and then through punishing them either economically or physically with prison. That's the only way you'll get some type of some type of compliance or make the tax code so simple that it's not complicated due to where everybody can comply easily, like a national sales tax. This is my opinion, national sales tax will solve a lot of problems versus this Byzantine laws about everything else. But that just didn't ask for me about my economics. One on one class, but so what was your question again, one more time, regarding regarding regarding the level of tip offs and or to pass on the tip. Yeah, the tip so that you call up something, say, Hey, I got a tip. And then a year later, you call back, say what to do my tip. They're gonna sit there and say, We're not going to tell you when there's good or bad, we're not going to tell you. Because by law, they're not required to tell you can't tell you. Because everything that when you turn over your tax turn to the IRS, there are very strict laws about how that information can be disseminated. That's one reason why President Trump was having some issues with Congress regarding his tax returns. His was part of those rules. So anything the IRS receives when it comes to a tax enforcement or tax administration issue? They're not disclosing that unless there's within a certain guidelines. So even people who want to turn somebody else in, you'll never know what happens to it. Right. But But But going back to the second part of the question, does that. Does that happen a fair bit? Do you get, you know, regular people saying, hey, the guy across the street, you know, he's just, you know, I met up with a Maserati or something. And I know, it's never it's never my neighbor is a tax cheat. It's the informants that I received. The good ones, where I was using a good example, you have someone comes in and says, I was told I will get a $5,000 refund, I only got a $4,000 refund. Bad. You look, the tax return, they said, never got the $4,000 refund to begin with. $400 when they're upset, because they were promised 5000 only got four, but how much it cost you. It cost me$1,000. So you paid $1,000 to get a $4,000 refund. Yeah, but that was do 5000 I'm mad. Well, you shouldn't have gotten the money to begin with. It's easy. In a sense, they turn themselves in Yeah, because they're mad. In many ways, they don't know what's false in a return. So that's reason why the return prepares is the is really the guilty one. These people are just, you know, offered free money. I don't get nothing get the money and I weren't supposed to get and it cost me a lot of money. You know, we call him I would call him just completely stupid. But you know, people believe this type stuff, the government's supposed to hand out money. And so in certain areas, they believe the government supposed to take care of them. And every way it's all free money. Does actually what the best ones because I could find out who prepared to return to where the office is located who just sit in front of and I can do some I can do some due diligence and go behind them and find out exactly what's going on. And then it'll it'll it'll mushroom, maybe CRC because these these people weren't the only ones. It was what we talked about just a minute ago. It was one out of 1000 that this happened to right? And you find out that it's not a it's not a$5,000 problem. It's a $500,000 problem, because it's across a large population. Yes, exactly. And then you go into go forward from there. And a lot of times with omens returns is very obvious. It's false. It's the false business it's the false income is to false dependent is to false education credit. There's a lot of things that are out there that are that are wrong. Kind of interesting, really interesting. I'm glad you guys are on the frontline there. Look, let's let's wrap it up there. This has been absolutely fascinating. And thank you so much for speaking with us today.