NATIONALLY RECOGNIZED FEDERAL LAWYERS
How Long Does an IRS Criminal Investigation Take? Timeline
|Last Updated on: 25th September 2023, 02:15 pm
How Long Does an IRS Criminal Investigation Take? Timeline
Dealing with an IRS criminal investigation can be stressful and frightening. Many people wonder, “How long will this take?” Unfortunately there is no simple answer, as each case is unique. However, this article aims to provide a general timeline and overview of the IRS criminal investigation process, so you know what to expect.
How Investigations Get Started
The IRS doesn’t open a criminal investigation on every suspected tax crime. First, they have to carefully review the evidence and determine if prosecution is warranted[1]. Some of the things they consider are:
- The nature and scope of the alleged violation
- The amount of tax loss to the government
- Past history of the taxpayer
- Will prosecuting this case encourage future compliance?
If the IRS decides to move forward, they will assign the case to a special agent in the IRS Criminal Investigation (CI) division[2]. The special agent will contact the taxpayer, usually by letter, to notify them of the investigation.
The Investigation Phase
Once the criminal investigation begins, the special agent will start gathering evidence. This can involve interviews, reviewing financial records, surveillance, working with confidential informants, and more[4].
The investigator will look for evidence of “intentional wrongdoing,” meaning the taxpayer knew they were violating tax laws. Negligence or honest mistakes generally won’t lead to criminal charges[3].
This investigative phase usually takes 6-12 months, but can drag on longer for complex cases[1]. The taxpayer may choose to cooperate with the investigation or invoke their right to remain silent.
Making a Recommendation
After the investigation, the special agent will analyze the evidence and make a recommendation. If they feel criminal prosecution is warranted, the case gets passed to the IRS Chief Counsel’s office. The Chief Counsel will independently review the case and decide whether to pursue prosecution[2].
If the Chief Counsel declines prosecution, the IRS may still seek civil penalties or back taxes. But the criminal investigation ends there.
The Prosecution Phase
If the Chief Counsel approves prosecution, the case gets handed over to the Department of Justice (DOJ). The DOJ may choose to prosecute the case themselves or refer it to a local U.S. Attorney’s office[2].
The prosecution phase moves slowly, often taking 12-18 months. During this time, prosecutors may negotiate plea deals with the defendant or proceed to trial[1].
IRS criminal cases have a remarkably high conviction rate – around 93%[3]. Once convicted, the defendant will face sentencing by a federal judge.
Typical Timeline
While every case is different, here is a typical timeline from start to finish:
- 0-6 months – IRS conducts initial audit and review
- 6-12 months – IRS conducts formal criminal investigation
- 1-3 months – IRS Chief Counsel reviews findings
- 12-18 months – DOJ handles prosecution
So in total, expect the process to take around 2-3 years from the initiation of an audit until final sentencing. However, the timeline can extend to 5 years or longer for complex investigations.
Reducing the Timeline
The best way to shorten the process is to cooperate fully with investigators and negotiate a settlement. In some cases, this may lead to a plea deal or reduced charges.
Hiring an experienced tax attorney or CPA can also help speed things along. They understand the system and legal process better than the average person.
However, there are no guarantees when dealing with the IRS and DOJ. Patience and perseverance are key during this difficult process.