When you think of the IRS, you naturally think of taxes. The Internal Revenue Service goes back to the Civil War when President Lincoln and Congress, in 1862, created the position of commissioner of Internal Revenue and enacted an income tax to pay war expenses. Congress repealed income tax 10 years later. They revived the income tax in 1894, but the Supreme Court ruled it unconstitutional the following year.
The IRS is a bureau of the Department of the Treasury and one of the world’s most efficient tax administrators. In the fiscal year 2015, the IRS collected almost $3.3 trillion in revenue and processed almost 240 million tax returns. That many tax returns generate a lot of criminal activity. This is more serious than the discrepancies an IRS auditor detects on an individual or corporate tax return. Criminal activity includes bankruptcy fraud, illegal gaming, healthcare fraud, money laundering, narcotics-related fraud, and more.
Individuals who want to become investigators with the IRS must be able to meet the minimum requirements for employment. Before even considering the appropriate education, you must be a United States citizen, be under the age of 37, and meet specific education and experience requirements.
Individuals may be hired for investigative positions with the IRS at the Grade 5, Grade 7 or Grade 9 federal levels. In order to qualify at the Grade 5 level, individuals must possess one of the following:
- A four-year bachelor’s degree in any field of study that includes at least 15 semester hours in accounting, along with at least 9 semester hours in finance, economics, business law, tax law, money or banking; OR
- At least 3 years of accounting and business experience that shows the application of accounting and auditing principles and general business practices; OR
- A Certified Public Accountant (CPA) Certificate; OR
- A combination of experience and education
A degree in accounting would be a good place to start your qualifications. According to the above information, the IRS places a premium on a degree in accounting. However, the field of accounting is so broad, which allows choices in the undergraduate degree programs. These specializations may include tax, auditing, corporate accounting, financial accounting, forensic accounting, government, and nonprofit accounting and accounting information systems.
DegreeQuery addressed accounting further in our article: What Classes Will I Have to Take for a Degree in Accounting? We will suggest more associated sources from DegreeQuery at the end of this report.
One of the other degrees mentioned is finance. You could enroll in a bachelor’s degree in financial accounting. This may provide the best of both worlds by combining accounting with finance. A Bachelor of Science in Finance and Accounting Management degree program will develop your understanding of how to prepare and interpret financial statements, create and manage budgets, measure and disclosure important metrics and information, leverage assets, and maximize investments. You would study principles of taxation, financial institutions, financial reporting and analysis, and cost accounting.
Another eligible degree is business law. A Bachelor of Arts in Legal Studies with a Business Law concentration is one option. It explores the many facets of the legal system and the careers that support it, preparing you for the business world or law school. As expected the curriculum focuses on law-related subjects. Some of which are transactional law, law practice, legal technology, and intellectual property.
Other business law programs may involve market analysis, bankruptcy, accounting for lawyers, and foreign investment laws.
Individuals with an accounting degree may opt to pursue a CPA (Certified Public Accountant). The educational requirements vary across states, but there are several consistencies. The main requirement is that candidates must have completed either a bachelor’s degree or 120 college credit hours in order to be eligible. Some states require a general bachelor’s degree while others require a degree in accounting or business related field like finance.
Regardless of the degree requirement, most states require a minimum level of accounting coursework and business-related coursework. For example, most states require you to complete at least 24 credit hours in accounting courses including intermediate and advanced financial accounting, cost accounting, and taxation. States typically also require a minimum of 20 credit hours in related business courses like finance, business law, and management. Best advice is to contact your state board.
Assuming you meet the educational mandates to be an IRA investigator, you must complete the four phases of evaluation:
- Phase I: Occupational Questionnaire
- Phase II: Online Assessments
- Phase III: Special Agent Test Battery (computerized competency-based assessment completed at a testing center)
- Phase IV: Skills Assessment Center (competency-based assessment taken at an in-person skills assessment center or at an IRS field office location)
Candidates who successfully complete all four phases of the evaluation process and receive an offer of employment must complete the pre-employment process. This includes passing a drug test and successfully completing a pre-appointment tax audit.