For whatever reason, you may find yourself facing IRS criminal investigation, a civil investigation or an audit that could end up as a criminal investigation. You could be accused of tax evasion or any other type of tax crime. It is surprisingly easy to find yourself in the middle of a tax issue. The help of a tax attorney could be essential to ensure that you do not go to jail or face the most lenient penalty available.
The IRS criminal investigation process
The IRS takes its criminal investigation process very seriously. It even has an intelligence unit, the Criminal Investigations (CI) department, whose sole purpose is to pursue individuals with tax-related crimes. The CI is composed of federal “Special Agents” who wear a badge and carry a gun. They are highly trained to conduct thorough financial investigations and rarely relent on their mission to convict tax evaders and fraudsters.
Being convicted of criminal tax violations comes with great consequences. Other than monstrous fines, which can include paying the cost of prosecution and jail time, the conviction could cause personal, social and financial ruin. To compound the situation, the IRS will not inform you that they are investigating you until they have gathered incriminating evidence.
Signs that you might be undergoing an IRS investigation:
- An IRS agent immediately halts their pursuit after they have been pleading with you to pay the government your tax debt and even fails to return your calls. The agent may be preparing themselves to hand over your case to the CI to look into your current or past tax crimes.
- The IRS agent who has been auditing you now disappears for several days or even consecutive weeks. The Collection and Examination divisions of the IRS halt their activities once your case is referred to the CI to avoid jeopardizing the investigation.
- Your bank informs you that the U.S. Attorney’s Office has subpoenaed your records or that the CI has summoned them.
- CI special agents contact your accountant. The accountant could also be subpoenaed to appear before a grand jury and carry your tax records with him. At this point, the case against you may be mounting.
- You learn from the IRS that one of your previous tax returns is going to undergo an audit.
- An IRS agent requests copies of a significant amount of documents or is overly interested in a number of sensitive transactions.
- An IRS agent seeks to know the purpose of a particular transaction, rather than its form.
- A CI special agent makes contact, either via a phone call or showing up at your business unannounced, and tries to obtain the most incriminating information they can from you without your attorney being present.
No matter what reason you suspect the IRS of investigating you, we recommend retaining an experienced tax law team to help you through any potential trouble.