Have you been notified by the IRS criminal-investigation division that you are under investigation for unfiled taxes, tax fraud, or any other deliberate misrepresentation on your tax return? If so, you will need the help of an experienced tax firm for criminal tax defense.
Some people believe that a notice from the criminal-investigation division is the same as being picked for audit. However, criminal investigation is much more serious than a routine audit, which is simply used as a means to examine your return items in detail. If you are under criminal investigation, it means that the IRS believes that you have deliberately committed a tax crime by either failing to file your taxes or by including false information on your tax return.
If the IRS finds that you are guilty of tax crimes, you can serve time in prison. This is why it is important to understand the process and have a tax firm on your side throughout the investigation. The IRS will conduct audits in an attempt to uncover fraudulent information on your tax filings. If you have been chosen for an audit, and you know that you have false information on your tax file, you will need to employ a tax firm for audit representation.
Besides being picked for an audit when you know you have included false information on your tax return, there are some other indications that you are being investigated. If you, your family members, or your co-workers have been visited by IRS criminal-investigation division agents, or even FBI agents, you could be under investigation for tax crimes. Your bank or any of your other financial institutions can receive a subpoena for documents related to your taxes and finances.
If the IRS believes you have deliberately failed to file taxes or included false information on a tax return, it may place you under criminal investigation instead of an audit.
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An audit merely examines your tax return items in detail to check for errors or discrepancies. A criminal investigation means you intentionally doctored your taxes to falsify your tax profile or decided you weren’t going to pay.
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If you have done any of the following, you may be in for a more serious investigation of possible tax crimes.
Other examples of tax crimes include using an offshore bank account to conceal assets, understating income, money laundering, tax evasion, and identity theft. If the IRS suspects hacking or phishing, a non-existent business, or an IRS scam to defraud people by text or phone, they dig even harder.
Several activities trigger criminal tax investigations:
If you have engaged in any of these activities, you should probably hire a professional criminal tax defense attorney.
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Tax crimes are federal crimes. Being convicted of a tax crime can result in penalties such as:
These quantifiable penalties do not take into account other consequences you might suffer, like the loss of your professional licenses, difficulty obtaining credit, and damage to your personal and professional reputation.
Luckily, there are ways to defend yourself against alleged tax crimes. If the charges stem from taking the advice of a lawyer, CPA, or qualified tax professional, you can use a defense called Advice of Counsel.
The government must prove you knowingly and willingly violated the law. If you can show you made an honest mistake instead of a deliberate choice, you might avoid criminal charges. If you voluntarily disclose tax violations before the IRS notices, the agency typically forgoes the expense of criminal charges.
If you can prove you have no tax owing, regardless of whether the IRS believes you underreported income and unreported expenses to offset the income, you may avoid charges.
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Instead of talking to agents directly, or trying to dispute the findings any agent may claim, you should employ the services of tax resolution experts. Top Tax Defenders has experience in criminal tax defense and can help you through a criminal tax investigation. Top Tax Defenders has over 27 years of experience in dealing with the IRS and knows how to help clients when they are subject to an IRS criminal investigation. The worst thing you can do if you're under investigation for tax crimes is go through the situation alone; instead, get Top Tax Defenders in your corner against the IRS.
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Criminal tax defense is legal representation for taxpayers who are under investigation by the IRS Criminal Investigation division for alleged tax crimes such as tax evasion, tax fraud, or willful failure to file. Unlike a routine audit, a criminal investigation means the IRS believes you deliberately violated tax law. The consequences can include prison time, substantial fines, and a permanent criminal record.
A tax audit examines your return for errors or discrepancies and is primarily a civil matter. A criminal tax investigation means the IRS believes you intentionally falsified your return, concealed income, or willfully failed to file. Audits can result in additional taxes and penalties. Criminal investigations can result in federal prosecution, prison sentences of up to five years, and fines up to $250,000 or more.
Common tax crimes include tax evasion, tax fraud, willful failure to file, underreporting income, substantially overstating deductions, concealing bank or brokerage accounts, money laundering, using offshore accounts to hide assets, failing to report cryptocurrency gains, identity theft, and falsely preparing tax returns for others. Mixing personal and business expenses to claim fraudulent deductions also triggers investigations.
Warning signs include being visited by IRS Criminal Investigation division agents or FBI agents, receiving a subpoena or notice that your bank or financial institution has received one, being contacted by agents who interview your family members or coworkers, and being selected for an audit when you know your return contains false information. Criminal investigations are conducted covertly. You may not know one is underway until agents make contact.
A criminal tax conviction is a federal offense and can result in prison sentences of up to five years per count, fines ranging from $10,000 to $250,000 or more, and reimbursement of the IRS's prosecution costs. Beyond these direct penalties, a conviction can result in loss of professional licenses, difficulty obtaining credit or employment, and lasting damage to your personal and professional reputation.
Tax fraud involves deliberately falsifying information on a tax return, such as fabricating deductions, hiding income, or creating false documents. Tax evasion is the willful attempt to avoid paying taxes owed, which can include hiding assets, using offshore accounts, or failing to file returns entirely. Both are federal crimes, but evasion typically involves a broader pattern of behavior to avoid the tax obligation altogether.
Several defenses may apply depending on the facts of your case. The Advice of Counsel defense applies if you relied on guidance from a licensed attorney, CPA, or tax professional. A good-faith mistake defense argues the violation was unintentional rather than willful; the government must prove you knowingly broke the law. Voluntary disclosure before the IRS initiates an investigation typically leads the agency to forgo criminal charges entirely.
Voluntary disclosure means proactively coming forward to the IRS to report tax violations before they initiate a criminal investigation. The IRS generally foregoes criminal prosecution when a taxpayer voluntarily discloses and cooperates fully. It does not eliminate civil penalties or the tax owed, but it significantly reduces the risk of criminal charges. Acting before agents make contact is critical. The option closes once an investigation begins.
Yes. Willful failure to file a tax return is a federal crime punishable by up to one year in prison per unfiled year and fines up to $25,000. The key word is willful. The IRS must prove you intentionally chose not to file, not that you simply forgot or were unable to. Filing delinquent returns voluntarily, even late, is treated far more favorably than waiting for enforcement action.
No. You have the right to remain silent and the right to legal representation. Anything you say to IRS Criminal Investigation agents can be used against you. Agents are trained to gather information, and even innocent-sounding statements can be used to support charges. Decline to answer substantive questions and retain a criminal tax defense attorney before any further contact with investigators.
Do not contact IRS agents directly or attempt to explain your situation without representation. Do not destroy, alter, or conceal any financial records. Doing so can result in additional obstruction charges. Preserve all documents and retain a criminal tax defense attorney immediately. The earlier you have representation, the more options you have to influence the outcome before charges are formally filed.
You need a criminal tax defense attorney. A CPA is qualified to handle tax preparation and standard IRS disputes, but criminal investigations require legal expertise, courtroom experience, and attorney-client privilege. Communications with a CPA are not protected the same way. A tax attorney can negotiate with prosecutors, build a defense strategy, and represent you in federal court if charges are filed.
