In a previous article titled Can You be Prosecuted for Perjury or False Statements in Your Tax Returns?, we described some of the elements of the False Statements tax crime. Here, we will go into greater detail about the two remaining elements of the offense, material matter and willfulness.
One of the most common evidence-gathering tactics used by the Criminal Investigative Division is the issuance of summonses. The IRS has very broad discretion to use summonses, which are authorized by statute to allow special agents to assess “correctness of a return or liability for tax,” or for the purpose of “inquiring into any offense connected with the administration or enforcement of the internal revenue laws” (1).
An important part of surviving a Criminal Investigation process is understanding and reasonable expectations on the part of the taxpayer. If a taxpayer understands the process as it proceeds, he or she will be less likely to undermine the goals of the investigation or take any steps to exacerbate his or her own precarious situation. While under investigation, taxpayers often have questions about particular topics.
Representing a client in a criminal tax investigation and prosecution is very different than in other criminal contexts. In a criminal tax case, counsel’s role is crucial during investigation and long before an indictment is ever made.
The Criminal Investigation Division of the IRS difference from the compliance groups in that its sole purpose is criminal enforcement, not determining or collecting correct tax liability from a taxpayer.
If you are being investigated for a criminal tax offense, you might wonder what defenses you can assert to avoid prosecution or severe penalties. The defense you assert must be specifically tailored to the criminal charge being brought against you. Because the IRS must prove each element of your crime beyond a reasonable doubt, your goal in coming up with a winning defense should be to negate at least one of the elements of the offense.
Taxpayers and counsel will interact with government personnel in various situations during the course of a criminal tax investigation or prosecution. In a previous article, we discussed how counsel should behave in IRS conferences and in correspondence with IRS or DOJ personnel. In this article, we will look into some additional interactions between government personnel and counsel.
Investigations into possible fraud and tax crimes conducted by the Criminal Investigations Diviion often involve numerous interviews of taxpayers, taxpayer’s representatives, and other third parties.
Criminal tax cases are primarily handled by special agents of the Criminal Investigation (CI) function of the Internal Revenue Service (IRS), the fraud referral and related divisions of the civil IRS divisions, the Tax Division of the Department of Justice, and the U.S. Attorney offices. Criminal tax cases are then referred for prosecution by the IRS to the Department of Justice Criminal Enforcement Section (CES).
If you are being investigated for a criminal tax offense, you might wonder what tax crime defense strategies you can assert to avoid prosecution or severe penalties. The defense you assert must be specifically tailored to the criminal charge being brought against you. Because the IRS must prove each element of your crime beyond a reasonable doubt, your goal in coming up with a winning defense should be to negate at least one of the elements of the offense.
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