IRS Special Agent - IRS Offshore Money | 3 Examples of Whistleblowing (Golding & Golding)

IRS Special Agent – IRS Offshore Money | 3 Examples of Whistleblowing (Golding & Golding)

IRS Special Agent – 3 Examples of How the IRS Finds your Offshore Money.

IRS Special Agents

The IRS Special Agents are specially trained IRS Agents who typically focus their investigations on Criminal Tax related issues.

And, with Offshore Tax issues remaining an IRS Top Enforcement Priority, it is important to understand what to do if you have unreported foreign accounts, income, or assets – and the IRS Special Agents come knocking at your door. (Or otherwise want to try to ruin your day…)

Important “Special Agent” Terms

IRS Criminal Investigation

Just because the IRS Special Agents are investigating you, does not mean you have been charged with a crime. An Investigation precedes a crime and just because you are investigated does not mean you will be charged or indicted.

Tax Fraud or Tax Evasion

Knowingly or willfully evading or avoid tax by either making false misrepresentations, underreporting income, or overstating deductions.

Offshore

Offshore refers to money outside of the United States. Analogous terms include: Foreign Money, Money Abroad, or Overseas Money.

IRS Offshore Voluntary Disclosure

A legal and IRS approved means for proactively getting into compliance for unreported income, accounts, assets, investments or retirement.

Warning

It is very important to understand that if a Special Agent from the Internal Revenue Service ever comes to your house, you should tell the Special Agent that you will have an attorney contact him or her — and ask for them to leave their card. Even if they refuse to leave you are not required to speak with the IRS Special Agents outside of the presence of an attorney

*Under no circumstance should you ever speak with a special agent outside the presence of your counsel.

Who are the Special Agents?

The special agents are a “Specially Trained” unit of the Internal Revenue Service. They are part of the Criminal Investigation Department, and their goal is to investigate facts and circumstances which they believe are criminal.

The Internal Revenue Service is operating at around 20 to 25% capacity. In other words, they are low on staff.

As such, you can believe that the IRS is not going to dispatch special agents to your house just for a simple inquiry. Rather, they must have received some Intel, or other damaging information alluding to the fact that you, or your business is conducting business illegally.

How the IRS Learns About Your Mis-Dealings?

Here are a few examples of common scenarios we have dealt with over the years:

Scott and His Girlfriend

Scott has been earning illegal income and then laundering the money by investing into legitimate businesses. Scott is a happily married man businesses but also has a girlfriend on the side. Scott told his girlfriend one day he would leave his family, and start a new life with her – but as the old story goes, he is concerned that he will lose visitation with his children and decides to cut the relationship off.

As you can imagine, Scott’s girlfriend is not happy and her friends tell her about the whistleblower program. Scott’s girlfriend decides she is going to contact the Internal Revenue Service an attempt to get Scott indicted so that she can recover a substantial windfall of money through the whistleblower program.

Michelle Was Not Very Nice to her Staff

Michelle had a side business in which she would receive investments from overseas an investment United States to purchase products. Over time, Michelle learned the money she was receiving was illegally sourced, and that in reality she was was acting as a middle-person in illegal dealings.

Michelle has a few employees that work for her and help her with her day-to-day activities. Michelle does not take good care of her employees and is not very nice to them. One day, she takes it a bit too far and embarrasses an employee in front of the rest of the staff.

The employee goes home that day upset and speaks with his wife. His wife recommends  that he contact Internal Revenue Service so that he can report the owner to the IRS…and she can get what’s coming to her.

Peter’s Business Partner Feels Slighted

Peter was a very shrewd businessman, with a strong a A-type of personality. Peter ran a successful business, which included clients who Peter knew was investing illegal funds with him. As such, Peter charged substantial fees to act as as “investment advisor.”

Peter’s partner worked with Peter to build the business from the ground up. But, when the business became very successful, Peter began to hoard the money — feeling as if he deserved a much bigger share in the profits. Peter’s partner did not feel the same way, and would rather bring them both down then to fight with Peter; his solution was to contact the IRS.

Why Do Special Agents Come to my House Unannounced?

The same reason why you make an appointment before you go somewhere. Because, if you do not make an appointment then the person will not be expecting you and will be unprepared.

That is what the IRS Special Agent’s hoping for. He or she is hoping that you are both unprepared and scared (and never watched 48 hours) and willing to talk to them on the spot outside of counsel.

If I Do Not Speak with Them, Can They Arrest Me?

Absent exigent circumstances, and unless the special agent has an arrest warrant in hand, he or she cannot arrest you on the spot – unless they watch you committing a crime. Rather, the IRS Special Agent  will normally evaluate the evidence and then determine whether they will refer the matter for prosecution, or not.

The mere fact that you will not open the door for the Special Agents or speak with them outside of counsel does not mean they can automatically arrest you.

You are not resisting arrest just because you refuse to speak with a special agent outside of your counsel. Rather, every person has the right to be represented or have an attorney present. That does not mean that the IRS Special Agent has to provide you an attorney during the initial interview phase, but it also does not mean that you cannot have your own attorney present during questioning.

How to Prevent a Criminal Investigation?

If you have not reported foreign income in prior years (or have been a conduit for illegal income) your best option may be entering IRS offshore voluntary disclosure. The following is a summary of the different IRS offshore voluntary disclosure programs and options:

Golding & Golding, A PLC

We have successfully represented clients in more than 1000 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.

Font Resize