IRS Criminal Tax Investigations

Has your business been percolating casually along, with little suspicion that the IRS may be investigating it?  If your business tax returns reflect accurate accountings to the best of your knowledge, probably the biggest IRS threat to you will arrive in the form of an audit, with potential increases in tax liability and some accompanying penalties and interest.  But in certain cases, an IRS investigation may be launched into an entity based on any one of a wide variety of factors.  And whether or not there is legitimate cause for the investigation, it can erode the financial and mental resources of the owners until the business folds.

The IRS’s stated mission is to collect fair and due taxes from both legal and illegal income. The Criminal Investigation Division (“CI Division”) thus targets all entities – legal and illegal – it believes to be deliberately and willfully attempting to evade taxes. The CI Division’s responsibility is to track down tax dodgers, and that duty encompasses ensuring business compliance with Internal Revenue Code.

The “illegal” provision of the IRS’s stated mission means that the CI Division searches for assets generated through illicit dealings, including drug deals and pyramid schemes. The CI Division is credited with putting away many nefarious criminal elements who wouldn’t ordinarily have been successfully prosecuted.

Remember:  it wasn’t Al Capone the Mob Boss who was convicted by the courts.  It was Al Capone the Tax Cheat.

The CI Division also often investigates entities with much more respectable presence in our society than mobsters. Those businesses involved in finances, accounting and tax return preparation, gaming, political office, the healthcare industry, real estate, and insurance are among the fields blessed as the focus of dedicated CI Division programs.

And once it initiates an investigation, the CI Division hunts for many different factors that can presage tax evasion. For example:

• A company’s unflagging reliance on long-instituted and previously accepted policies and procedures gives rise to actions now considered illegal because of recent alterations in the Internal Revenue Code.
• An employee vested with heavy financial responsibility may fall short in duty.
• A company may inadvertently commit acts that violate accepted financial practices.
• Financial officers deliberately decide not to be compliant with the pay-over of payroll taxes in the immediate future, believing that the taxes can be paid at a later date, with no one much the wiser.
• And pressing cash flow issues may result in unwise financial decisions, which then lead to a downward spiral of additional unwise financial decisions.

The problem with any one of these scenarios is that the law allows great leeway for the CI Division to make a case for criminal tax activity.  From the time the case is opened, then, you are at risk for assessment of additional tax,  heavy penalties and interest, and, worse yet, imprisonment.

If your business finds itself the center of an IRS investigation, if an IRS Special Agent has contacted you, your bank, or your accountant about your business, if you receive a notice from the IRS that your audit reveals significant differences in reported income and deductions – if any of these events develop, consult with our team of professionals at Law Offices of Christy Lee, P.C.

Our tax boutique will approach your case proactively, researching the background concerning the CI Division’s allegations against you and laying out your options in clear, concise language so that you are aware of the avenues of action available to you and their possible consequences, both negative and positive.  Then we’ll communicate with the necessary authorities on your behalf, working hard to secure a settlement in your favor.  We will represent you as necessary at every stage of the case, from administrative and grand jury investigations through pretrial negotiations, jury trials, and hearings. And we’ll offer post-resolution counsel to help ensure that the triggers resulting in the investigation are mitigated as much as possible in the future.

Don’t attempt to handle an IRS investigation without legal assistance.  Law Offices of Christy Lee, P.C., knows the intricacies of the Internal Revenue Code, and we know how to protect your best interests.