Tax Fraud and Tax Evasion

If you know or have reason to believe that you are the target of an Internal Revenue Service (IRS) criminal investigation, your best option is to contact experienced legal counsel immediately. Do not discuss your situation with IRS criminal investigators without legal advice. Legal counsel can make the difference between freedom and time spent in a federal penitentiary.

To discuss your case with an experienced tax attorney, contact the dual-licensed attorney-CPAs, tax attorneys, and tax professionals at the law firm of Daniel Rosefelt & Associates, LLC at (301) 656-4424 or reach out by completing our ten-second contact form to know your real options.

Tax Fraud 

Tax fraud can occur in a variety of ways:  misrepresenting income on a return, overstating deductions, or concealing bank accounts, to name but a few.  Fraudulent activity can include both affirmative acts, such as subscribing to a false tax return, or omissions, such as fraudulent failure to file.  The central question is whether the taxpayer willfully engages in conduct intended to conceal, mislead, or otherwise prevent the collection of taxes believed to be owing.   

The IRS and the Department of Justice actively and aggressively work to combat tax fraud in all forms.  Tax fraud is a serious offense that can carry substantial monetary penalties or jail time.  If you filed false tax returns or believe you may be at risk of IRS criminal investigation, it is critical that you seek the advice of a competent tax attorney right away.  

Badges Of Fraud

“Badges of Fraud” are behaviors and facts that suggest to the IRS that an individual or organization has engaged in tax fraud, tax evasion, or other criminal conduct. A non-exhaustive list of Badges of Fraud can be found here.

The Criminal Investigation Process

Typically, suspected tax crimes are investigated by the IRS Criminal Investigation Division (CID). These investigators, many of whom are CPAs or other financial experts, are federal agents trained in law enforcement techniques and tactics. 

CID agents are located in IRS field offices throughout the country, from which they conduct exhaustive tax fraud investigation before deciding whether to recommend your case for prosecution. Special agents will attempt to interview you, and often your family, friends and business associates as well, to gain information on which to base their recommendation. They will also intensively review your financial records in search of unexplained assets and other suggestions of fraud.

If the CID agent completes the investigation and recommends prosecution, the IRS will conduct two additional levels of review before a final decision is made to forward the case to the United States Department of Justice, Tax Division, in Washington, D.C., for prosecution.

At the Justice Department, federal prosecutors specializing in criminal tax violations will once again review the case and make the final decision to prosecute or decline prosecution of the case. If the Department of Justice Tax Division in Washington approves prosecution, the case is sent to the local U.S. Attorney’s office with the direction that the individual or individuals named be indicted and prosecuted for the offenses alleged.

Avoiding Criminal Prosecution

In tax crime cases, the multi-tiered review and approval process can work to your advantage. There are a number of different opportunities available to taxpayers and their counsel to counter a federal criminal case before it ever reaches a grand jury for indictment. At each stage, your lawyer will have the opportunity to meet with government attorneys and convince them to decline prosecution of your case.

If the government has a strong case against you, it is unlikely that you will be successful in avoiding prosecution. However, many times experienced counsel can convince the IRS or the Department of Justice Tax Division that the taxpayer made serious mistakes but did not intentionally engage in criminal conduct. And in a criminal tax case, your attorney will have a number of opportunities to convince the government to decline prosecution prior to referral to the grand jury.

Call Us Before You Talk With The IRS

Penalties for tax evasion can include prison time. If you know or suspect that you are or will be the subject of an IRS criminal investigation, you must get legal counsel as soon as possible.

Contact the dual-licensed attorney-CPAs and tax attorneys at the law firm of Daniel Rosefelt & Associates, LLC, at (301) 656-4424 or reach out by completing our ten-second contact form to know your real options. We serve clients in the U.S. and around the world from our offices in Bethesda, Maryland.