How Do I Handle a Criminal Tax Investigation By The IRS?

Paying taxes is a part of life in the United States of America and doing so accurately is crucial. When taxes are not correctly completed or are avoided altogether, the IRS has certain processes in place to ensure the mistake is caught and remedied. In some cases, the process can proceed all the way to a criminal tax investigation.

If you find yourself under investigation by the IRS, it is important to reach out to the tax attorneys in Scottsdale from Silver Law. IRS Criminal Investigation is serious and can lead to hefty consequences. It will not be a situation you should attempt to handle yourself or with your CPA.

A criminal tax investigation is done by the IRS when they suspect intentional tax fraud, tax evasion, or other tax-related crimes. The goal is to look into whether you knowingly and intentionally committed tax fraud or evasion.

Some people might wonder how a criminal tax investigation and a tax audit are different. If you’re unsure which one you are being contacted for, your tax attorneys in Scottsdale can help you determine the situation.

However, audits are much less serious since you’re not suspected of any crime. You may have to face penalties after an audit and may have to pay taxes you should have paid originally, but that is the extent of an audit. Criminal investigations are much more serious and can land you in jail.

To be investigated for tax fraud or tax evasion, there are several triggers. It is possible you will be put under criminal tax investigation for the following reasons:

• A significant amount of underreported income
• Intentionally not filing tax returns for multiple years
• Filing false documents or fraudulent tax returns
• Engaging in suspicious cash transactions to keep from paying taxes
• Concealing income using foreign bank accounts or shell companies
• A tip from an informant or bank is reported to the IRS
• Not paying payroll taxes to the IRS that are held from employees

It is likely that if you are under criminal tax investigation, that you are aware of why it could be. If so, reach out to your tax attorneys in Arizona for the best next steps to ensure the best possible outcome.

If you are suspected of fraud or some other tax crime, the IRS will be alerted through an audit, a collections officer, or some other individual who might be involved in your financial processes. Initially, special agents begin with what is called a “primary investigation”. During this first stage, they will take a look at your information to determine if tax fraud or some other financial crime might have occurred. The special agent’s supervisor will then decide if moving forward is necessary.

If your primary investigation results are reviewed and approved to move on to the next stage of investigation, the official criminal investigation will be opened. The special agent will start gathering evidence to prove the criminal activity. They will obtain this evidence through many methods including:

• Interviews of third-party witnesses
• Surveillance
• Search warrants
• Forensically examining evidence
• Subpoenaing bank records
• Looking over financial data

During this stage, you have certain rights. If you believe your rights were violated or you would like help knowing what they are, reach out to the tax attorneys in Scottsdale from Silver Law for direction.

At this point, if there is not enough evidence to substantiate criminal activity, the special agent along with their supervisor will deem the case ‘discontinued’. If the evidence does prove criminal activity, the special agent will create a written report with their findings and will recommend prosecution.

Many criminal investigation officials will take a look at this written report before approving the prosecution. Upon approval, the report will be sent to The Department of Justice, tax division, or the United States Attorney, depending on the findings. Every time the report is reviewed, it is possible it will be declared not enough evidence to prove a crime.

The last stages of your investigation will include prosecution. Your special agent will help prepare for the trial and prosecutors will take over the investigation from there. If you do not have a tax attorney in Arizona representing you already, now is a good time to find one. If you are found guilty, which is the ultimate goal of the entire process, you will face criminal penalties.

The penalties for tax crimes are serious and are meant to discourage anyone from committing the crime. The penalties you could face upon conviction can include:

• Felony or misdemeanor charges
• Prison sentences
• Fines of up to $250,000 for individuals and $500,000 for corporations
• Restitution of unpaid taxes, penalties, and interest
• Seizure of assets, bank accounts, or property

If you suspect that you are under criminal investigation for tax fraud or tax evasion, there are several important steps that you should take to protect your rights and ensure the best possible outcome.

• Remain Silent Without Your Attorney Present: It is likely you will be contacted for an informal interview. It’s important you do not say anything to accidentally implicate yourself.
• Hire An Experienced Criminal Tax Attorney: As soon as you can,hire an attorney. The tax attorneys in Scottsdale can make sure your rights are protected and can develop a legal defense for your case.
• Look To See If Voluntary Disclosure Is An Option: In many cases, if no formal charges have been initiated, you may be able to reduce penalties or even avoid prosecution if you volunteer information through the IRS Voluntary Disclosure Program.
• Avoid More Tax Compliance Issues: Do everything in your power to continue filing your taxes on time and resolve any other past compliance issues.

Facing a criminal tax investigation is serious and you may be unsure of how to proceed once you become aware that a special agent is on your case. Our tax attorneys in Scottsdale from Silver Law have a combined 100 years of experience. They all used to work for the IRS and have an in-depth understanding of tax law from both sides of the story.

Reach out to our attorneys today to make sure your rights are protected, you have a solid legal defense, and you have peace of mind throughout the process.

Email: lchapman@silverlawplc.com
Website: taxcontroversy.com

Arizona Location
7033 E. Greenway Pkwy, Ste 200
Scottsdale, AZ 85254
Office:480-429-3360

Nevada Location
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Las Vegas, Nevada 89145
Office: 702-726-6819

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207 Henderson, NV 89074  

San Diego Location
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San Diego, CA 92109

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