If you ever receive a notice from the Criminal Investigation branch of the IRS, you are in some hot water and need immediate legal counsel on your side. IRS criminal investigations move slow, but they are very sure. According to the IRS, they successfully prosecute around 3,000 cases per year and have never had a successful prosecution rate of under 90% since the creation of the department in 1919. With a record like that, it’s no wonder people get terrified of going to prison for tax problems.
Typically, for our business clients, IRS and state tax issues concerning the failure to report or pay payroll taxes or state sales tax. Our clients that are individuals often get on the IRS radar because they forgot to file past tax returns and got caught, or fell far enough behind on their tax bills that the IRS stepped up their enforcement actions. The IRS has an entire criminal investigation wing whose sole goal is to go after people who are criminally negligent in their tax obligations. While the number of people who do go to jail each year is small compared to the entire tax-paying population, it’s no picnic for the people who are under investigation.
The IRS has three main methods of proof they use to show you broke the law:
Direct fraud, such as misrepresenting income and expenses or claiming credits and exemptions that are invalid.
Net worth calculations that compare net worth across time and compare it to the expected taxable income. Florida and many other states also use this method to discover tax problems.
Tracking expenditures that are outside the range of expected incomes as reported to the IRS.
Sometimes a failure to pay taxes can be the trigger that pulls down the rest of an illegal financial scheme. You can read some stories about IRS prosecutions on the IRS website.
They will use a variety of methods to get the proof required to prosecute and check it for accuracy including interviewing third parties with knowledge of the situation. Your old business partner or a spouse could be called to give testimony. And, since they are the government, your records are open to their scrutiny. Once the IRS Criminal Investigation team has their eye on you, there’s no place you hide. You will need to have someone on your side that knows and has developed relationships with the IRS and will fight on your behalf.
If you have been contacted by a criminal investigator from the IRS or from the Florida Department of Revenue, our suggestion is that you hire a tax attorney with experience in IRS criminal investigations on your side.
Our attorneys have over 30 years of tax law practice and can help you through what can be a traumatic experience. No lawyer can guarantee that you can avoid jail time or heavy fines, but we will do our best to fight for the best possible outcome given your circumstances. Fighting the IRS or the Florida DOR is not something you want to handle yourself.
If you need a criminal tax investigation attorney in Miami, Boca Raton, or Fort Lauderdale, call Zuckerman Law for a consultation.
Zuckerman Law, L.L.C.
Phone: (954) 280-8292