Dallas ? Tax cheats are much more likely now to do hard time, federal authorities said recently.

The U.S. Justice Department, working in tandem with the Internal Revenue Service, has dramatically increased the number of criminal cases filed — a trend it plans to continue.

“People who engage in tax fraud are increasingly likely to be on the receiving end of not only civil enforcement actions but also of criminal prosecution,” said Eileen J. O’Connor, assistant attorney general for the tax division of the Justice Department.

The Justice Department referred 1,129 defendants to the U.S. Attorney for criminal prosecution in 2003, a 35 percent increase over 2000. The Justice Department’s tax division also is using its civil power to stop illegal tax schemes by obtaining injunctions in federal court.

The injunctions prohibit promoters from selling illegal tax schemes on the Internet, at seminars or through other means. Last year, the government filed lawsuits to shut down 35 promoters of abusive tax schemes. In 2000, no such lawsuits were filed.

IRS and Justice Department authorities every year seem to announce some kind of initiative against tax cheats just before the April 15 deadline. But tax lawyers said the government really meant business this year.

“This year it is true that enforcement is on the rise,” said Larry A. Campagna, a Houston tax attorney. “They are hiring and training a lot of new agents.”

Government authorities said they were increasing their enforcement efforts against the following schemes:

• Using bogus trusts to conceal control over income and assets.
• Shifting assets and income to hidden offshore accounts.
• Failing to report income.
• Failing to file tax returns.

Campagna said one of the favorites of tax cheats was to set up foreign bank accounts or trusts and then not report the interest income. Also, tax avoiders will have credit card activity paid from those accounts, with no records sent to the United States, he said.

“Last year, the IRS invited people to come in and resolve these matters civilly with a small penalty, but that program expired last April,” Campagna said. “Now the enforcement ratchets up, and the next step is possible criminal prosecution.”

The Justice Department and IRS recently released details of several cases they had brought in recent months, including several involving abusive trusts. For example, an alleged California promoter of tax fraud schemes, Edward J. Lashlee, was sentenced to three years in prison for creating thousands of abusive trusts to help clients hide income and assets.

The government also alleges that Lashlee provided clients with offshore bank accounts and Visa debit cards issued by Swiss American National Bank of Antigua.

“The IRS is ramping up its enforcement efforts, particularly for the high-income individuals and corporations,” IRS Commissioner Mark Everson said in a written statement. “We have arrested the decline in enforcement actions that began in the 1990s.”