IRS Target Letter

Strategies for Fighting Tax Evasion Cases After Receipt of IRS Target Letter

Getting a target letter from the IRS can be scary. It likely means you’re under investigation for tax evasion. But don’t panic! There are strategies you can use to fight back. I’ll walk through some key steps to take after getting that dreaded letter in the mail.

What is a Target Letter?

A target letter from the IRS Criminal Investigation division informs you that you’re under investigation for tax crimes. It provides details about the investigation and your legal rights. These letters often request that you voluntarily provide information or schedule an interview with the IRS about your tax returns or business activities. Receiving a target letter means the IRS has evidence suggesting criminal tax violations. But don’t assume you’re doomed – you still have options.

Don’t Ignore It

It can be tempting to stick your head in the sand and pretend the target letter doesn’t exist. Fight that urge! Ignoring the letter won’t make the IRS investigation go away. You need to take action. The IRS may view ignoring the letter as an admission of guilt. And that can lead to an indictment.

Get Legal Representation

Consult with a tax attorney as soon as possible after receiving a target letter. An experienced tax lawyer can advise you on the best legal strategies and represent you through the investigation process. Handling a tax evasion case requires specific expertise. A tax attorney knows how to navigate IRS procedures and negotiate with investigators. Don’t go it alone.

Exercise Your Rights

The target letter outlines your legal rights, including your Fifth Amendment right against self-incrimination. You’re not required to provide potentially incriminating information to the IRS. Politely decline to participate in a voluntary interview. Supply only the records specifically requested in the letter. And have your tax attorney review any information before submitting it.

Request a Proffer Session

A proffer session allows your tax attorney to present your side of the story to prosecutors and try to resolve the case before charges are filed. This is an opportunity to explain extenuating circumstances and show you acted in good faith. If the proffer goes well, they may drop the investigation. But be cautious about what you admit – don’t hand them evidence against you.

Negotiate a Plea Deal

If the IRS moves forward with prosecution, immediately explore plea bargain options. Negotiating a plea deal could help you avoid trial and minimize penalties. But you need experienced legal guidance on the pros and cons. A plea bargain may require admitting guilt and could still carry jail time.

File Amended Returns

Filing amended tax returns to correct errors or omissions can demonstrate you’re trying to comply. Pay back taxes and interest owed. This good faith effort could persuade the IRS to be lenient. But consult your tax attorney first – amending returns could actually strengthen their case against you.

Request a Civil Settlement

In some cases, it may be possible to request a civil settlement instead of criminal prosecution. You’ll still have to pay back taxes, interest, and penalties. But the IRS may agree to avoid formal charges if the amount owed is repaid. An attorney can advise if this option makes sense.

Take It to Trial

If you believe you have strong evidence refuting the IRS accusations, you may decide to take your chances at trial. But tax trials are complex and the stakes are high. Work closely with your tax lawyer to evaluate your options. Make sure you understand the risks before rolling the dice.

Explore Legal Defenses

Your tax attorney can raise legal defenses to fight the charges. For example, they may argue you relied on a professional tax preparer’s advice or you had no intent to break tax laws. Other potential defenses include Constitutional violations by the IRS, improper procedures, or lack of evidence.

Don’t Panic

Receiving an IRS target letter is scary. But by taking the right steps, you can mount a strong defense. Consult with an experienced tax attorney, protect your rights, and explore all your legal options. With the right strategic approach, you can resolve your tax evasion case on favorable terms.

References

IRS Criminal Investigation Strategies
IRS Abusive Transactions Process
DOJ Criminal Tax Case Procedures
Reducing the Federal Tax Gap
IRS Priorities on Fraud
DOJ Tax Division Budget