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The IRS Criminal Investigation Process Step-by-Step

March 21, 2024 Uncategorized

The IRS Criminal Investigation Process Step-by-Step

Dealing with the IRS can be intimidating, but a criminal investigation takes things to a whole new level. If you find yourself the target of a criminal tax investigation, it’s important to understand the process and know your rights. This step-by-step guide breaks down exactly what happens during an IRS criminal investigation.

How Investigations Get Started

There are a few different ways an IRS criminal investigation can begin:

  • An audit uncovers potential criminal activity
  • Informants provide tips to the IRS Criminal Investigation Division (CID)
  • IRS computers flag returns with anomalies
  • Other law enforcement agencies share information with the IRS

In each case, the information gets reviewed by the IRS to determine if a full criminal investigation is warranted. This involves looking at the evidence and getting approval from IRS officials. Just because you’re under audit doesn’t mean you’ll face criminal charges – but it does increase the chances if the audit turns up potential tax fraud.

The Investigation Phase

Once the IRS decides to open a criminal case, CID agents swing into action. This is when things start feeling more “criminal” from the taxpayer’s perspective.

Investigators have broad authority to issue subpoenas, review financial records, conduct interviews, and seize evidence. Taxpayers often don’t realize the extent of the investigation until they or their associates get contacted by the IRS.

The goal is to gather enough evidence to conclusively determine whether criminal activity occurred. This may involve reviewing several years of tax returns, bank statements, business records, and other financial documents. Interviews with the taxpayer and third parties (like business partners or accountants) are also common.

CID agents are experienced financial investigators. They know how to dig deep and piece together the big picture from fragments of evidence. Don’t assume you can hide anything from them.

Christine Twomey
Christine Twomey
2024-03-21
Just had my Divorce case settled 2 months ago after having a horrible experience with another firm. I couldn’t be happier with Claire Banks and Elizabeth Garvey with their outstanding professionalism in doing so with Spodek Law Group. Any time I needed questions answered they were always prompt in doing so with all my uncertainties after 30 yrs of marriage.I feel from the bottom of my heart you will NOT be disappointed with either one. Thanks a million.
Brendan huisman
Brendan huisman
2024-03-18
Alex Zhik contacted me almost immediately when I reached out to Spodek for a consultation and was able to effectively communicate the path forward/consequences of my legal issue. I immediately agreed to hire Alex for his services and did not regret my choice. He was able to cover my case in court (with 1 day notice) and not only was he able to push my case down, he carefully negotiated a dismissal of the charge altogether. I highly recommend Spodek, and more specifically, Alex Zhik for all of your legal issues. Thanks guys!
Guerline Menard
Guerline Menard
2024-03-18
Thanks again Spodek law firm, particularly Esq Claire Banks who stood right there with us up to the finish line. Attached photos taken right outside of the court building and the smile on our faces represented victory, a breath of fresh air and satisfaction. We are very happy that this is over and we can move on with our lives. Thanks Spodek law 🙏🏼🙏🏼🙏🏼🙏🏼🙌🏼❤️
Keisha Parris
Keisha Parris
2024-03-15
Believe every single review here about Alex Z!! From our initial consultation, it was evident that Alex possessed a profound understanding of criminal law and a fierce dedication to his clients rights. Throughout the entirety of my case, Alex exhibited unparalleled professionalism and unwavering commitment. What sets Alex apart is not only his legal expertise but also his genuine compassion for his clients. He took the time to thoroughly explain my case, alleviating any concerns I had along the way. His exact words were “I’m not worried about it”. His unwavering support and guidance were invaluable throughout the entire process. I am immensely grateful for Alex's exceptional legal representation and wholeheartedly recommend his services to anyone in need of a skilled criminal defense attorney. Alex Z is not just a lawyer; he is a beacon of hope for those navigating the complexities of the legal system. If you find yourself in need of a dedicated and competent legal advocate, look no further than Alex Z.
Taïko Beauty
Taïko Beauty
2024-03-15
I don’t know where to start, I can write a novel about this firm, but one thing I will say is that having my best interest was their main priority since the beginning of my case which was back in Winter 2019. Miss Claire Banks, one of the best Attorneys in the firm represented me very well and was very professional, respectful, and truthful. Not once did she leave me in the dark, in fact she presented all options and routes that could possibly be considered for my case and she reinsured me that no matter what I decided to do, her and the team will have my back and that’s exactly what happened. Not only will I be liberated from this case, also, I will enjoy my freedom and continue to be a mother to my first born son and will have no restrictions with accomplishing my goals in life. Now that’s what I call victory!! I thank the Lord, My mother, Claire, and the Spodek team for standing by me and fighting with me. Words can’t describe how grateful I am to have the opportunity to work with this team. I’m very satisfied, very pleased with their performance, their hard work, and their diligence. Thank you team!
Anthony Williams
Anthony Williams
2024-03-12
Hey, how you guys doing? Good afternoon my name is Anthony Williams I just want to give a great shout out to the team of. Spodek law group. It is such a honor to use them and to use their assistance through this whole case from start to finish. They did everything that they said they was gonna do and if it ever comes down to it, if I ever have to use them again, hands-down they will be the first law office at the top of my list, thank you guys so much. It was a pleasure having you guys by my side so if you guys ever need them, do not hesitate to pick up the phone and give them a call.
Loveth Okpedo
Loveth Okpedo
2024-03-12
Very professional, very transparent, over all a great experience
Bee L
Bee L
2024-02-28
Amazing experience with Spodek! Very professional lawyers who take your case seriously. They treated me with respect, were always available, and answered any and all questions. They were able to help me very successfully and removed a huge stress. Highly recommend.
divesh patel
divesh patel
2024-02-24
I can't recommend Alex Zhik and Spodek Law Firm highly enough for their exceptional legal representation and personal mentorship. From the moment I engaged their services in October 2022, Alex took the time to understand my case thoroughly and provided guidance every step of the way. Alex's dedication to my case went above and beyond my expectations. His expertise, attention to detail, and commitment to achieving the best possible outcome were evident throughout the entire process. He took the time to mentor me, ensuring I understood the legal complexities involved to make informed decisions. Alex is the kind of guy you would want to have a beer with and has made a meaningful impact on me. I also want to acknowledge Todd Spodek, the leader of the firm, who played a crucial role in my case. His leadership and support bolstered the efforts of Alex, and his involvement highlighted the firm's commitment to excellence. Thanks to Alex Zhik and Todd Spodek, I achieved the outcome I desired, and I am incredibly grateful for their professionalism, expertise, and genuine care. If you're in need of legal representation, look no further than this outstanding team.

Criminal Charges

After a thorough criminal investigation, the IRS will make a determination about whether to pursue criminal prosecution. Not all investigations lead to criminal charges – but many do.

Common criminal tax charges include:

  • Tax evasion
  • Filing false returns
  • Failure to file returns
  • Employment tax evasion
  • Obstructing the IRS

Willful, intentional misconduct is generally required for these felony charges – but “willfulness” has a broad definition in tax law. Negligence, recklessness, or conscious avoidance of the facts can meet the threshold.

If the IRS believes it has enough evidence, it will refer the case to the Department of Justice (DOJ). The DOJ will then independently review the case and decide whether to prosecute.

The Prosecution Phase

If the DOJ takes the case, it will be assigned to a federal prosecutor. The prosecutor represents the United States in bringing charges against the taxpayer.

The prosecutor has discretion in deciding exactly what charges to pursue. They can charge multiple tax crimes, or only the most serious. Mail fraud, wire fraud, or other related charges may be included as well.

At this point, a criminal defense lawyer is absolutely vital. An experienced tax attorney can negotiate with the prosecutor to minimize charges and seek a favorable plea agreement.

If no plea deal can be reached, the case will proceed to trial. The prosecutor will aim to prove guilt beyond a reasonable doubt. Criminal trials are complex and high-stakes – not somewhere you want to be without expert legal counsel.

The Penalty Phase

If found guilty at trial, or if a plea deal is reached, the final phase is sentencing. Tax crimes carry stiff penalties under federal law. Some common punishments include:

  • Prison time
  • Fines up to $100,000 per count
  • Probation
  • Forfeiture of assets

Judges consider the sentencing guidelines but have wide latitude in determining appropriate penalties. A defense lawyer’s role is to present mitigating factors to seek the most lenient sentence.

In addition to criminal penalties, taxpayers face civil fines and back taxes. The IRS will still pursue payment of all taxes owed, interest, and penalties.

Avoiding Criminal Exposure

The best way to avoid an IRS criminal investigation is to fully comply with tax laws. Always report all income, claim only legitimate deductions, and file accurate returns.

If you’ve made mistakes in past returns, consider amending them or voluntarily disclosing through one of the IRS programs. Don’t wait for the IRS to find the problem first.

If you do find yourself facing a criminal tax investigation, hire an experienced attorney immediately. Invoke your right to remain silent and don’t try to deal with it alone.

While scary, even criminal tax cases can be resolved favorably in many instances. But it takes great caution, legal expertise, and negotiation skills to reach the best outcome.

The Bottom Line

IRS criminal investigations are no joke. If you get that dreaded letter from CID, you need to take it seriously. Understand the process, know your rights, and consult with a lawyer right away. With proper representation and the right strategy, it is possible to mitigate the fallout and move on with your life.

The tax attorneys at [Law Firm Name] have extensive experience representing taxpayers facing IRS criminal investigations and prosecution. If you’re worried about criminal exposure, don’t hesitate to contact us for a free case evaluation.

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CLAIRE BANKS

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RAJESH BARUA

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