TAX CONTROVERSY AND LITIGATION
Tax Fraud / Criminal
Investigations
Tax evasion, tax fraud, tax crimes
Many federal white-collar prosecutions are for tax
crimes, such as tax evasion, failure to file income
tax returns, or tax fraud. There are some special
considerations to keep in mind if you are under investigation
for violations of the Internal Revenue Code.
At the federal level criminal investigations are
typically conducted by the FBI. In tax crime cases,
the procedure is significantly different. The criminal
tax case is investigated by the Internal Revenue Service
Criminal Investigation Division ("CID").
CID investigators are federal agents trained in law
enforcement techniques and tactics. Most are also
accountants by trade, and many have achieved their
CPA. There are CID offices throughout the country.
There are several “indicators” that
a CID investigation may be pending:
A. You receive notice of a pending audit and have
knowledge that the return to be audited contains
improper deductions or understates your income;
B. Your bank notifies you that the IRS’s CID
or the U.S. Attorney’s Office has requested
copies of your bank statements;
C. Your accountant or the person who prepared your
return is subpoenaed to appear before a U.S. Grand
Jury with your returns and records; or
D. An IRS Special Agent contacts you for an interview.
If any of these occur you are a target for a criminal
investigation or, in the case of “A”
above a potential target. In any of these events
you should immediately contact a tax attorney before
speaking with anyone, especially the Special Agent.
A tax attorney can immediately start to counter
the allegations, raise defenses, exercise your legal
rights and quash requests for certain information.
When a CID agent completes an investigation and recommends
that an individual be prosecuted, there are at least
two stages of review by Internal Revenue Service attorneys
prior to the approval of prosecution. Once the Internal
Revenue Service approves prosecution at its highest
level, the case is forwarded to the United States Department
of Justice Tax Division in Washington, DC, where federal
prosecutors specializing in criminal tax violations
review the case and decide whether or not to authorize
prosecution. If the Department of Justice Tax Division
in Washington approves prosecution, the case is sent
to the local US Attorney's office with the direction
that the individual or individuals named be indicted
and prosecuted for the offenses alleged.
Continued…
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be, legal advice. You should consult an attorney for individual advice
regarding your own situation. Copyright © 2002-2005 by Gary L. Coulter,
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