If you are facing an IRS criminal investigation, the impact on your professional and financial well-being can be devastating. An experienced tax lawyer will help ensure that your business doesn’t make costly mistakes that could lead to an investigation, as well as offer experienced defense if you are already in trouble with the IRS. Contact Sodowsky Law firm, P.C. to learn more about how we can protect your rights.
How Is an IRS Criminal Investigation Different From an IRS Audit?
When the IRS audits you, they want to know whether there are any errors in how your taxes were calculated. With a criminal investigation, the IRS is building a case against you to be prosecuted by the U.S. Attorney’s Office.
A criminal investigation is also a much more serious matter than an audit, potentially involving considerable consequences. You could face enormous fines and legal costs, as well as jail time. You could also lose your professional license, job, and future livelihood.
IRS criminal investigations are not pursued as frequently as audits, although an investigation could be triggered by an audit. They may also be triggered by an error, misunderstanding, or malpractice by your accountant — for example, unreported income, false statements, or declaring too many deductions could lead the IRS to suspect tax evasion or fraud.
What Is the Investigation Process?
The IRS’s Criminal Investigation Division (CID) conducts its investigations thoroughly and ruthlessly. CID is staffed by federal agents trained as financial investigators carrying guns and badges. It could take years before you are even aware that you are under investigation. In that time, CID will interview family, friends, and others who may know you and your finances. They will use this time to gather evidence of tax evasion or tax fraud.
Once you are notified that you are being federally prosecuted, you will face relentless confusion and stress. Because you may not have known when you were being criminally investigated, you could have made incriminating statements.
So make sure you contact an experienced IRS criminal investigation attorney as soon as you suspect you are under investigation. We can guide you through the IRS criminal investigation process so you know what to expect.
What Are the Signs of an IRS Criminal Investigation?
You should watch for the following five warning signs that the IRS is conducting a criminal investigation against you:
IRS Agent Goes Quiet
An IRS agent may have been auditing you or pressing you about your taxes. If they suddenly stop and do not return your calls, they could be referring your case to the CID. Once the agent refers your case they will take over without notifying you of the investigation. The agent will cease their activities to not harm the CID’s prosecution.
Your Bank Is Contacted
CID or the U.S. Attorney’s Office could contact your bank to request records using a summons or grand jury subpoena. This is a sign that you need to hire an experienced IRS criminal investigation lawyer. They can help you acquire the same records the IRS received from your bank.
Your Accountant Is Contacted
CID or the U.S. Attorney’s Office could also contact your accountant for your tax records. Your accountant could also be subpoenaed to appear before a grand jury. It’s important to remember that anything you say to your accountant could be used against you. Accountant-client privilege does not apply in criminal cases.
However, conversations with your attorney are protected by attorney-client privilege. You can talk to someone without fear of your words being used in the criminal case against you. Further, your attorney can retain your accountant to protect what you say.
You Understated Income or Overstated Deductions on Tax Returns IRS Is Auditing
The IRS may be auditing your tax returns. If you understated or overstated income or deductions, you could be facing IRS criminal investigation. Once you are aware of any such understatement or overstatement, stop talking to your accountant.
CID Agent Contacts You
A CID special agent could go so far as to call you or show up in person. If so, you should have no doubt that you are under criminal investigation. The agent will want to gather incriminating statements or documents from you. So make sure not to say or do anything without your IRS criminal investigation attorney present. Tell the agent simply that you want to speak with your lawyer.
Talk to a Fairfax VA IRS Tax Attorney Today
If you suspect you’re the subject of an IRS criminal investigation, it’s important to act quickly. An experienced IRS tax attorney can help you protect your rights against the IRS and build a strong defense early. Contact Sodowsky Law Firm, P.C.