How to Stop an IRS Criminal Investigation
The Internal Revenue Service (IRS) is authorized to conduct criminal investigations of tax-related crimes, and they take these investigations seriously. If you’re faced with an IRS criminal investigation, it’s essential to know how to handle it and potentially stop the investigation from proceeding. In this article, we’ll outline the steps you can take to stop an IRS criminal investigation.
Understanding the Scope of IRS Criminal Investigations
Before we dive into how to stop an IRS criminal investigation, it’s crucial to understand the scope of these investigations. The IRS has the authority to investigate and prosecute a wide range of tax-related crimes, including:
• Tax fraud
• Tax evasion
• Identity theft
• Money laundering
• Obstruction of IRS collection efforts
The IRS Criminal Investigation (CI) unit, also known as CI, is responsible for investigating and prosecuting these crimes. CI uses a variety of tools, including audits, tax examinations, and undercover operations, to gather evidence and identify suspects.
Common Signs of an IRS Criminal Investigation
If you’re a target of an IRS criminal investigation, you may receive a notice or have agents visit your home or place of business. However, the IRS may not always notify you that you’re under investigation. Some common signs of an IRS criminal investigation include:
• You receive a surprise visit from IRS agents
• You’re asked to submit tax returns or financial information that’s not part of an audit
• You receive a notice from the IRS stating that your identity or Social Security number was compromised
• You notice irregularities in your financial transactions or bank accounts
• You receive a suspicious or threatening phone call claiming to be from the IRS
How to Stop an IRS Criminal Investigation
While it’s challenging to stop an IRS criminal investigation outright, there are steps you can take to limit its scope and potential impact:
• Seek professional legal representation: Work with an experienced tax lawyer who has expertise in tax controversies and criminal tax investigations. A qualified attorney can help you navigate the investigation process, identify potential legal vulnerabilities, and develop a defense strategy.
• Coordinate with the IRS: The IRS may be more receptive to cooperation and alternative solutions if you demonstrate good faith and transparency. Be honest and forthcoming about any mistakes or discrepancies, and be prepared to provide accurate financial information.
• Correct any errors or inaccuracies: Identify and correct any errors or inaccuracies in your tax returns, financial statements, or other records. This can help minimize the scope of the investigation and reduce potential legal risks.
• Implement proper internal controls: Ensure that you have robust internal controls in place to prevent and detect errors, fraud, and theft. This can include processes for monitoring and documenting transactions, as well as separating duties and responsibilities.
Alternative Resolution Options
If you’re facing a potential criminal investigation, you may be eligible for alternative resolution options, such as:
• Pre-Offense Diversion Agreements (PODAs): A PODA allows the IRS to suspend an investigation in exchange for specific obligations, such as cooperating in the investigation or submitting additional information.
• Subpoena Compliance Programs: These programs provide additional information and resources to individuals and businesses who are non-compliant with tax requirements, but are willing to comply.
• Omitted Foreign Financial Activities Disclosure Program: This program is designed for individuals who failed to disclose foreign financial activities or assets on their tax returns.
IRS Collection Efforts and Liabilities
If you’re involved in an IRS criminal investigation, you may also be dealing with IRS collection efforts. The IRS can attempt to collect taxes, interest, and penalties through:
• Levy of your assets: The IRS can seize and sell your assets, including bank accounts, real estate, and vehicles, to satisfy tax liabilities.
• Garnishment of wages: The IRS can intercept a portion of your paychecks to satisfy tax debts.
• Collection actions: The IRS can send written notices, file tax liens, or impose wage garnishment to collect delinquent taxes.
To protect your assets and interests, it’s essential to work with a tax lawyer who can help you develop a strategy for responding to IRS collection efforts. This may include filing administrative appeals, requesting IRS lien withdrawals, or seeking concessions from the IRS.
Conclusion
An IRS criminal investigation can be a traumatic and stressful experience. By understanding the scope and procedures of these investigations, and by taking proactive steps to address any issues, you can potentially stop the investigation from proceeding. Seek the guidance of a qualified tax lawyer to help you navigate the process and limit potential legal risks.
