According to the IRS, “Legal source tax crimes are crimes involving legal industries, legal occupations, and legally earned income associated with the violation of Title 26 and Title 18 of the U.S. Code. And includes cases that which threaten the tax system…  Illegal source financial crimes are crimes involving proceeds derived from illegal sources other than narcotics… Narcotics related financial crimes are significant narcotics-related tax and money-laundering crimes.”

In 2011 there were 4,720 tax crime investigations initiated by the IRS.  Of those crimes 1,922 were legal source tax crimes, 1,810 were illegal source financial crimes, and 988 were narcotic related tax crimes.  All but 23 of the 4,720 investigations were completed and 3,410 involved prosecutions.  Of the 3,410 who were prosecuted 2,206 were sentenced and 1,802 of those were incarcerated.  Only 403 of those incarcerated were narcotic related tax crimes. Source: IRS.gov