IRS Arrest Warrant – What Does it Mean & What Should You do?
First, if you ever find yourself in any situation in which you are being arrested or questioned/interrogated, you should never speak with the arresting officer/agent…never, ever.
Nothing you say will make it better, and nothing you say will make them let you go. T
hey have a job to do, and by speaking directly to them outside of the presence of your attorney — you are just making their job easier (and why do that?)
IRS Arrest Warrant
Generally, almost always, IRS matters are civil. Even the notoriously evil FBAR Willful penalties, which can reach 100% of the maximum value of the foreign bank account balances in a multi-year audit, are civil in nature.
IRS Investigation Process
The process can go in many different directions, and take on many different variances – but they tend go like this before it evolves into a criminal situation:
You Receive An Audit Notice or Examination Notice
In this type of situation, you learn you are under audit (civil, not criminal). You may have knowledge about potential fraud and evasion issues that you do not want the IRS to find out (Eggshell Audit) or the IRS may have information about potential fraudulent and evasion issues that you do not know they have (reverse eggshell audit).
You Get Caught During the Audit
For one reason or another, the IRS Agent is aware you are lying, AND the nature of the misrepresentations you made to the IRS could have criminal implications. Still, the IRS Agent handles CIVIL matters, and cannot issue any arrest warrant or question you further regarding potential criminal issues.
The agent will usually stop the audit. You may not know why, or believe you pulled one over on the agent – but the IRS agent has other plans.
Rather then closing investigation, the IRS Agent refers the matter to the Special Agents/CI (Criminal Investigation). The special agents will “interview” you to determine if the matter should be referred for possible criminal prosecution.
IRS Special Agents Visit You
Just like your mother-in-law coming to visit, the introduction by the Special Agents are usually unannounced, in order to catch you off-guard. The moment you are confronted by the IRS Special Agents you should say nothing other than you want to speak with your attorney. You ask them for a card, and tell them once you speak with your attorney, he or she will be in touch with the agent.
The Special Agents may or may not read you your Miranda rights (typically they do not). This is because you may be under investigation, but have not been arrested or detained. Still, anything you say will be used against you.
Special Agents Refer the Matter to DOJ/AUSA
At this point in the investigation, if the Special Agents believe you committed a tax crime, the Special Agents will refer the matter to the Department of Justice. If it is more than just tax implications, typically the matter is referred to U.S. Attorney’s office.
Now the Matter is Criminal
Once the matter has been referred to criminal prosecution, is when you have a real problem. At this time, an arrest warrant may be issued for your arrest, and if you have not yet retained an Attorney, now is the time do so.
IRS Voluntary Disclosure to Prevent Escalation to IRS Fraud & Evasion
The IRS recently issued new and updated procedures for the IRS Voluntary Disclosure Program for both U.S. (Domestic) and Foreign (Offshore) income, assets, accounts, and investments.
What if I an Out of IRS Compliance?
When you have not met your prior year IRS foreign bank account compliance obligations, your best options are either the Traditional IRS Voluntary Disclosure Program, or one of the Streamlined Offshore Disclosure Programs.
Golding & Golding, A PLC
We have successfully represented clients in more than 1,000 streamlined and voluntary disclosure submissions nationwide and in over 70-different countries.
We are the “go-to” firm for other Attorneys, CPAs, Enrolled Agents, Accountants, and Financial Professionals across the globe.