IRS Criminal Investigations for Tax Fraud

Tax fraud occurs when a taxpayer willfully falsifies information on a tax return to limit their tax liability. This can occur in many forms. Under-reporting or omitting income, overestimating expenses or deductions, failing to collect employment taxes, violating employer holding requirements, or making false statements to government officials can all trigger a criminal investigation by the Internal Revenue Service (IRS). The consequences of a criminal investigation are severe. A finding of tax fraud can result in up to five years’ imprisonment, a fine up to $250,000 ($500,000 for a corporation), plus all of the government’s prosecution costs. The IRS can also use a criminal tax conviction to prove civil fraud and assess civil penalties of up to 75% of the amount due.

Every criminal investigation is led by a “Special Agent” that has one simple objective – to mount a case against you for prosecution. Criminal investigations are often difficult to detect and highly invasive. It is not unusual for a Special Agent to show up to your home or work unannounced. This is an intentional tactic to take you by surprise to increase the likelihood you may unknowingly harm yourself. Questions regarding the intent behind certain transactions or financial decisions are strategically aimed at eliciting incriminating information. Special Investigators will also interview your family, friends, coworkers, or employees in order to acquire evidence that shows tax fraud may have occurred. This wide-ranging style of harassment can last for years and be extremely intimidating. There are, however, warning signs that a criminal investigation has commenced.

Any contact whatsoever from a Special Agent likely indicates a criminal investigation is underway. This may be in the form of a letter, phone call, or service of a subpoena to appear in front of a grand jury. The Special Agent may even issue a summons upon your bank, financial advisor, or accountant requiring them to provide certain documentation such as your tax records. Unfortunately, statements made to your accountant are not protected by any type of confidentially in a criminal case. Not all warning signs are as obvious and may be difficult to detect. If you are already under civil audit and the audit is abruptly suspended before completion, your case may have been referred to a Special Agent for criminal investigation. Similarly, if IRS personnel conducting your civil audit become unexplainably unreachable, it could mean they are putting your case on pause in order to not jeopardize a possible criminal prosecution. These subtle tactics can lead to lengthy sentences of imprisonment or substantial fines without the help of an experienced criminal defense attorney.

Those facing criminal investigations often obtain legal representation early in the process. The IRS is tremendously resourceful but their ability to bring a successful prosecution is reliant upon building a case against you. Berry Law recognizes this critical vulnerability and has the experience to protect your personal and financial well-being. The attorneys at Berry Law understand that tax fraud cases are inherently complex. However, our team of attorneys is uniquely experienced to defend you against the intrusive nature of criminal investigations.

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