Signs of an IRS criminal investigation
If an IRS Special Agent contacts you, this is an indication that the IRS is conducting a criminal investigation. You will be advised that you are not required to speak with the Special Agent and that you may have an attorney present. Take his advice and do not talk or give any information to any agent. Politely, tell him simply that you wish to consult an attorney and he should leave. Likewise, if you are currently under criminal investigation and have been cooperating and talking with any Special Agent, you should stop cooperating immediately and consult with an attorney.
If your bank notifies you that the Criminal Investigation Division of the IRS or the U.S Attorney’s Office is requesting copies of your bank records, there is a high likelihood that you and/or your company are under criminal investigation.
If your accountant is subpoenaed to appear before the Grand Jury and bring your records, a Federal Grand Jury is being utilized to conduct a criminal investigation of you and/or your company. The Grand Jury is gathering evidence at the request or referral of the IRS or other government agency. Since any conversations with your accountant are not protected under an “attorney-client type privilege”, you should not have any further discussions with your accountant on the facts of your case until you have engaged legal counsel.
If you receive a notice from the IRS that one or more of your previous tax years are being audited AND you know that the returns filed contain either understatements of income or overstatements of deductions, or both, you should not have any further discussions with your accountant regarding the returns until you have engaged legal counsel. Although this is initially only a civil audit, Revenue Agents are trained to be on the lookout for fraud red flags and to refer potential fraud to the Criminal Investigation Division. The existing “accountant-client privilege” does not extend to criminal investigations so your accountant may be forced to tell the Internal Revenue Service what you have told him.
If any of these events happen to you, you should without delay engage the services of a tax attorney who can monitor and appropriately respond at the earliest stage in a criminal investigation; including as appropriate, obtaining copies of whatever records your bank turns over to the IRS, quashing summons for information, utilizing available legal privileges and defenses to prevent some of the personal records that can be turned over to a Grand Jury, and providing the best responses to an auditor’s questions and requests for documents in a civil audit with criminal implications.
The Internal Revenue Manual provides examiners with a laundry-list of the most common badges of fraud:
Types of tax crimes
The most common tax crimes include tax evasion, willful failure to file return or supply requested information, willful failure to collect or pay over withholding tax, preparing false tax returns or submitting false tax documents, making false statements to governmental tax officials, making false claims, perjury, bribery, aiding and abetting in the preparation of false documents, and failure to file currency transaction reports. In addition, there are comparable state tax law violations in the event the same acts are involved with state governmental tax agencies. Tax crimes may be charged against individuals, as well as corporate officers, partners, fiduciaries and others involved in the tax reporting chain. Whether the tax crime charges will be filed is dependent upon the amount of admissible evidence against the taxpayer, not dependent upon the amount involved. Therefore, tax crimes are relevant to all taxpayers, not only the taxpayers that have made significant amounts of taxes. The amount of the tax loss to the government is only relevant in determining the sentence, not whether the crime occurred.
Additional tax crimes include evasion of payment in tax collection cases, stacking of corporate and individual tax liabilities, aiding and abetting tax fraud, failure to collect or pay over withholding tax, false withholding statements, and conspiracy to impede or defeat the collection of tax.
Schedule a confidential consultation
When you have your consultation with us, an experienced tax attorney will analyze the facts of your case and discuss your next steps. We’ll explain how we can protect your legal rights, what your options are, and how the whole judicial process works, so you’ll know exactly what happens.
Plus, you’ll learn how we guide you through the court system and champion your rights, using all the options in the legal system to defend and protect you.
For example, we’ll review the complaint against you; the steps taken by IRS agents in their investigation of your case, to determine if they are valid; and he’ll show you how the special agent’s testimony can be impeached.
In summary, you’ll get:
- An experienced attorney to answer your questions and advise you on next steps.
- Personalized attention. Our attorneys will return your phone calls promptly, keep you informed, and answer all questions to help you put the pieces back together.
- Reasonable fees and an estimate of your costs before the process begins.
- Aggressive defense. Our attorneys take a tough stance to protect you and make your investigation go away as soon as possible.
If you want an attorney you can talk to, who understands what you want, who is interested in you and your situation, and who fights to get you results, call us at 312-471-0126 for your confidential consultation.
Contact us to schedule a tax attorney consultation. We represent individuals and business and are always pleased to speak with you. Please call us at 312-471-0126 to discuss your situation in detail.