Can You Stop an IRS Criminal Investigation: What to Know

How Can You Stop an IRS Criminal Investigation

How Can You Stop an IRS Criminal Investigation 

In general, there is no fast or quick way that you can just stop an Internal Revenue Service criminal investigation once it begins — short of admitting to a crime and pleading guilty. Of course, most Taxpayers do not want to plead guilty that early in the investigation. And, once the taxpayer knows that they are under a criminal investigation, it can be a very uncomfortable feeling because the ultimate goal of the IRS criminal investigation is to find facts sufficient to pursue a criminal prosecution. Conversely, for taxpayers on the receiving end of the IRS Criminal Investigation, their ultimate end game is to have prosecution avoided or if that is inevitable, to avoid incarceration and high fines and penalties. Let’s take a quick look at four things you should consider if you find yourself on the receiving end of an IRS criminal investigation.

Do Not Speak Without an Attorney

One of the most important things of advice that taxpayers under IRS criminal investigation should take is that they should never speak with the IRS special agents or any other government agent unless their attorney accompanies them. The IRS special agents are trained to obtain information from taxpayers and while you may be focused on one piece of information you are concerned about then knowing, you may end up divulging other information during an investigation that the IRS did not have the information for, or could have even obtained. By relying on an attorney, the Taxpayer will put themselves in the best position to not get in their own way.

Did The Taxpayer Commit the Crime?

Another important aspect of an IRS criminal investigation is determining whether the person committed the crime. For example, if the IRS believes the person committed tax evasion — and they know that they committed tax evasion — then this will impact whether they will want to consider settling the matter beforehand and reaching a plea agreement or not. Alternatively, if they are definitely sure that they did not commit a crime and that the IRS is correctly investigating them, that is another factor to consider in determining whether they should accept a plea deal or fight.

Does the Prosecution have Facts Sufficient to Win?

If it turns out that the defendant did commit the crime and the prosecution has sufficient facts, witnesses, and evidence to effectively prosecute the case — then the defendant has to be careful. Many of the crimes that the IRS will allege in its complaint or indictment carry a hefty prison sentence. So, taxpayers who are staring down the barrel of a hefty prison sentence will want to consider how strong the prosecution’s case is. That is because the further the IRS gets into their criminal investigation oftentimes the less likely there will be to plead out a case more beneficial towards the defendant.

Should the Defendant Plead Out?

Whether or not the taxpayer should plead or fight to the end is an important assessment that the taxpayer must make with their family and attorney. Oftentimes, once a criminal prosecution is in motion, the Internal Revenue Service/DOJ has a very high win or success rate. They typically do not charge cases that they do not believe that they can win and so even for taxpayers who don’t want to do any time in jail or prison, they have to consider the worst-case scenario that could happen depending on the outcome of their case before a jury of their peers. Sometimes, it is just better to plead out the case and put it to rest.

Late Filing Penalties May be Reduced or Avoided

For Taxpayers who did not timely file their FBAR and other international information-related reporting forms, the IRS has developed many different offshore amnesty programs to assist taxpayers with safely getting into compliance. These programs may reduce or even eliminate international reporting penalties.

Current Year vs Prior Year Non-Compliance

Once a taxpayer missed the tax and reporting (such as FBAR and FATCA) requirements for prior years, they will want to be careful before submitting their information to the IRS in the current year. That is because they may risk making a quiet disclosure if they just begin filing forward in the current year and/or mass filing previous year forms without doing so under one of the approved IRS offshore submission procedures. Before filing prior untimely foreign reporting forms, taxpayers should consider speaking with a Board-Certified Tax Law Specialist who specializes exclusively in these types of offshore disclosure matters.

Avoid False Offshore Disclosure Submissions (Willful vs Non-Willful)

In recent years, the IRS has increased the level of scrutiny for certain streamlined procedure submissions. When a person is non-willful, they have an excellent chance of making a successful submission to Streamlined Procedures. If they are willful, they would submit to the IRS Voluntary Disclosure Program instead. But, if a willful Taxpayer submits an intentionally false narrative under the Streamlined Procedures (and gets caught), they may become subject to significant fines and penalties. 

Need Help Finding an Experienced Offshore Tax Attorney?

When it comes to hiring an experienced international tax attorney to represent you for unreported foreign and offshore account reporting, it can become overwhelming for taxpayers trying to trek through all the false information and nonsense they will find in their online research. There are only a handful of attorneys worldwide who are Board-Certified Tax Specialists and who specialize exclusively in offshore disclosure and international tax amnesty reporting. 

Golding & Golding: About Our International Tax Law Firm

Golding & Golding specializes exclusively in international tax, specifically IRS offshore disclosure. 

Contact our firm today for assistance.