An IRS criminal investigation typically moves through several stages: referral, primary investigation, subject criminal investigation, the Special Agent Report, Department of Justice authorization, and, if charges are pursued, a grand jury indictment. Timelines vary widely and are covered in detail below.
Three decision points generally stand between an IRS-CI investigation and federal criminal charges: IRS-CI’s prosecution recommendation, DOJ authorization, and, when an indictment is required, the grand jury’s decision to return one. Each is a point where the case can stop.
This page walks through the process as it runs, with the statute or IRS manual provision behind each step. One thing changed recently. The former DOJ Tax Division no longer exists as a separate organizational division, and criminal tax authorization now sits with a different DOJ component. That is covered below.
IRS Criminal Investigation (IRS-CI) evaluates an allegation, gathers evidence, and either recommends prosecution or closes the case. Special agents do the investigative work, and IRS-CI uses defined investigation stages and management approvals as a case develops.
- Referral. A civil examiner, an informant, another agency, or IRS data analysis flags the matter to IRS-CI.
- Primary investigation (PI). A special agent assesses whether criminal noncompliance is plausible and whether prosecution is viable.
- Subject criminal investigation (SCI). Management elevates the PI. This is the full investigation.
- Special Agent Report (SAR). The agent writes the prosecution recommendation, and it moves up the CI review chain.
- DOJ authorization. A Department of Justice component reviews the case and authorizes or declines charges.
- Grand jury and indictment. A federal grand jury decides whether probable cause supports the charges.
The IRS defines the PI and SCI stages and their approval requirements in Internal Revenue Manual 9.4.1, Investigation Initiation, and the contents of the Special Agent Report in IRM 9.5.8, Investigative Reports.
There is no fixed timeline. Subject investigations can run months or several years, depending on the number of tax years, entities, witnesses, financial records, and investigative issues involved. The ranges in the table below are practical estimates drawn from how these cases are staffed and reviewed, not IRS deadlines or published averages. No statute sets a general deadline for how long IRS-CI may investigate. The criminal statute of limitations limits when charges can be brought, subject to tolling and other exceptions, but it does not require the investigation itself to finish by any particular date.
| Stage | Typical duration | Who decides whether it advances | Do you know it is happening? |
|---|---|---|---|
| Referral to IRS-CI | Days to weeks | Fraud Enforcement Advisor and the referring examiner’s group manager | No. Civil audit activity may be suspended or transferred while the referral is evaluated. |
| Primary investigation | Weeks to a few months | Special Agent in Charge or Assistant Special Agent in Charge | Usually no. |
| Subject criminal investigation | 6 months to 2 years | Special Agent in Charge; Chief, CI for sensitive cases | Often yes, once agents make contact or serve a summons. |
| Special Agent Report and CI review | 2 to 6 months | Supervisor, Centralized Case Review, ASAC, SAC, and IRS Chief Counsel Criminal Tax | Usually no. |
| DOJ authorization | 2 to 6 months | Assistant Attorney General, National Fraud Enforcement Division | No. |
| Grand jury to indictment | 1 to 12 months | Federal grand jury and the U.S. Attorney’s Office | No, unless a subpoena reaches you. Indictments can be sealed. |
| Indictment to trial | 6 months to 2 years | The court, subject to the Speedy Trial Act | Yes. |
Long stretches of silence are normal and are not a signal that the case is closed. IRS-CI has no obligation to tell you an investigation is open, and no obligation to tell you when it closes.
It starts with a referral, most often from inside the IRS. A revenue agent or revenue officer who finds firm indications of fraud during a civil matter suspends that work and prepares Form 2797, Referral Report of Potential Criminal Fraud Cases, under IRM 25.1.3. Referrals also come from informants, other federal agencies, and IRS data matching. The conduct patterns that produce those referrals are covered in the chapter on what triggers an IRS criminal tax investigation.
A special agent is a sworn federal law enforcement officer who investigates criminal violations of the tax code. Under 26 U.S.C. § 7608(b), special agents may execute and serve search and arrest warrants, serve subpoenas and summonses, make warrantless arrests for internal revenue felonies on reasonable grounds, and seize property subject to forfeiture. They are accountants and federal agents at once, and they build financial cases for prosecution rather than assessing tax. The chapter on the IRS Criminal Investigation Division covers how the division is organized and what it prioritizes.
Knowing which IRS employee is standing in front of you matters more than almost anything else at first contact.
| IRS employee | What they do | Role in a potential criminal case | What their appearance means |
|---|---|---|---|
| Revenue agent | Conducts civil audits and determines the correct tax | Conducts civil examinations; may refer suspected criminal fraud to IRS-CI. | A civil examination is open. |
| Revenue officer | Collects assessed tax through liens and levies | Handles collection of assessed liabilities; may refer suspected criminal conduct when appropriate. | You owe an assessed balance. |
| Special agent (IRS-CI) | Investigates criminal tax violations and builds cases for prosecution | Investigates potential criminal violations and develops cases for prosecution. | A criminal investigation is open. You may be its subject or a witness. |
An administrative summons signed by a special agent, rather than a revenue agent, strongly signals that IRS-CI is actively investigating the matter. The chapter on signs you are under investigation covers the other indicators.
You may decline to answer questions that could incriminate you, and IRS-CI regulations let you have a lawyer present during questioning. Both protections apply before you are charged, even though the Sixth Amendment right to counsel does not attach until formal charges begin.
No, unless you are in custody. Miranda warnings attach to custodial interrogation. In Beckwith v. United States, 425 U.S. 341 (1976), the Supreme Court held that an IRS special agent’s non-custodial interview of a taxpayer does not require Miranda warnings, and that the investigation having “focused” on the taxpayer changes nothing.
IRS-CI gives a different warning instead. Under IRM 9.4.5.8.3.1.1, on first contact with the subject of an investigation, a special agent must display credentials and badge and advise that the agent cannot compel answers where they might be incriminating, that anything said or produced may be used in a criminal proceeding, and that the person may seek the assistance of an attorney before responding. Hearing that script confirms you are the subject, not a witness.
Immediately, but not under the Sixth Amendment. The Sixth Amendment right to counsel attaches only once adversarial judicial proceedings begin, which the Supreme Court fixed at “formal charge, preliminary hearing, indictment, information, or arraignment” in Kirby v. Illinois, 406 U.S. 682, 689 (1972) and confirmed in Rothgery v. Gillespie County, 554 U.S. 191 (2008), which held that a defendant’s initial appearance before a magistrate judge marks the initiation of adversary proceedings that trigger attachment. During an investigation, no charge exists, so the Sixth Amendment has not attached.
The operative authority is a Treasury regulation. Under 26 C.F.R. § 601.107(b)(1), “A witness when questioned in an investigation conducted by the Criminal Investigation Division may have counsel present to represent and advise him.” IRM 9.4.5.8.1 directs agents to that regulation and requires them to inform a witness of the right on request. The Fifth Amendment protects against compelled self-incrimination, so you may decline to answer questions that could incriminate you.
Agents build the case from bank records obtained by administrative summons, interviews with third parties, search warrants where probable cause supports them, and financial reconstruction across multiple tax years. Much of that happens before you know the investigation exists, which is deliberate: it secures records and witness statements before behavior changes.
The element the government works hardest to establish is willfulness. In Cheek v. United States, 498 U.S. 192, 201 (1991), the Supreme Court defined willfulness in criminal tax cases as “a voluntary, intentional violation of a known legal duty.” Cheek carries two holdings, and the second gets dropped more often than it should:
- A genuine, subjectively held misunderstanding of what the tax law requires negates willfulness, whether or not a court would call the belief reasonable. That is a jury question.
- A belief that the tax laws are unconstitutional or invalid is not a defense. Such a belief demonstrates knowledge of the provision and a decision to disregard it.
The full element-by-element breakdown of the charges themselves is in the chapter on criminal tax evasion charges. Agents also compute tax loss during this phase, which drives the offense level at sentencing rather than the choice of charge; the chapter on criminal tax penalties and sentencing covers how that calculation works.
Four Internal Revenue Code sections cover the most commonly charged federal tax crimes.
Whether an offense is a felony or a misdemeanor is set by the statute, not by the amount of tax involved.
The fine printed in each Code section is decades out of date. Under 18 U.S.C. § 3571, a defendant may be fined the greatest of the amount in the offense statute, twice the gross gain or loss, or the class-based default for a felony; that default is $250,000 for an individual and $500,000 for an organization. The operative column below reflects § 3571.
Illustrative timing only, not IRS- or DOJ-published averages or deadlines.
| Statute | Offense | Classification | Maximum prison, per count | Fine in the Code section | Operative maximum fine, individual |
|---|---|---|---|---|---|
| 26 U.S.C. 7201 | Attempt to evade or defeat tax | Felony | 5 years | $100,000 | $250,000 |
| 26 U.S.C. 7202 | Willful failure to collect or pay over tax | Felony | 5 years | $10,000 | $250,000 |
| 26 U.S.C. 7206(1) | False return signed under penalties of perjury | Felony | 3 years | $100,000 | $250,000 |
| 26 U.S.C. 7203 | Willful failure to file, pay, keep records, or supply information | Class A misdemeanor | 1 year | $25,000 | $100,000 |
Each section also imposes prosecution costs. Section 7203 becomes a five-year felony where the willful failure involves the cash reporting requirements of § 6050I. Statutory text: § 7201, § 7202, § 7206, § 7203.
26 U.S.C. § 6531 sets a three-year default and then enumerates eight categories that get six years. Each tax year runs its own clock, so an older year can expire while a newer one stays live.
The following ranges are practical estimates, not IRS- or DOJ-published averages. Actual cases can move substantially faster or slower.
| Offense | Limitations period | Authority |
|---|---|---|
| Tax evasion, 26 U.S.C. 7201 | 6 years | 26 U.S.C. 6531(2) |
| False return under penalties of perjury, 26 U.S.C. 7206(1) | 6 years | 26 U.S.C. 6531(5) |
| Aiding or assisting a false return, 26 U.S.C. 7206(2) | 6 years | 26 U.S.C. 6531(3) |
| Willful failure to file or pay, 26 U.S.C. 7203 | 6 years | 26 U.S.C. 6531(4) |
| Willful failure to keep records or supply information, 26 U.S.C. 7203 | 3 years | Default period; the 6531(4) carve-out does not reach this branch |
| Conspiracy to defraud the United States, 18 U.S.C. 371, tax object | 6 years | 26 U.S.C. 6531(1) and 6531(8) |
| Failure to collect or pay overtax, 26 U.S.C. 7202 | 6 years | Not enumerated in 6531; six circuits have addressed the question and all apply the 6-year period: United States v. Evangelista, 122 F.3d 112 (2d Cir. 1997); United States v. Gollapudi, 130 F.3d 66 (3d Cir. 1997); United States v. Adam, 296 F.3d 327 (5th Cir. 2002); United States v. Blanchard, 618 F.3d 562 (6th Cir. 2010); United States v. Gilbert, 266 F.3d 1180 (9th Cir. 2001); United States v. Porth, 426 F.2d 519 (10th Cir. 1970). DOJ takes the same position. |
The period runs from the commission of the offense to the return of the indictment. Section 6531 tolls the clock while a person is outside the United States or is a fugitive. The six-year period for a § 7203 failure to file runs from the return due date, since no return was filed.
Three authorities in sequence: IRS-CI management, a Department of Justice component, and a federal grand jury. Criminal tax charges cannot be filed on a special agent’s judgment alone.
The special agent’s prosecution recommendation is packaged as a Special Agent Report under IRM 9.5.8.6, covering the recommended charges, the years at issue, the statute of limitations, venue, the elements of each offense, and the subject’s own explanations and defenses. It passes through the agent’s supervisor, Centralized Case Review, the Assistant Special Agent in Charge, and the Special Agent in Charge. IRS Chief Counsel Criminal Tax attorneys review the evidence’s legal sufficiency before the case leaves the IRS.
This is where most published guidance, including guidance still on government websites, is now wrong.
The Department of Justice Tax Division was dissolved. Effective December 9, 2025, its functions were split between the Civil Division and the Criminal Division, and 28 C.F.R. subpart M was removed (90 FR 57139). Effective August 24, 2026, criminal tax moved again. Attorney General Order 7108-2026 created the National Fraud Enforcement Division and re-created subpart M under that name (91 FR 53357). The current regulation, 28 C.F.R. § 0.70(b), assigns to the Assistant Attorney General, National Fraud Enforcement Division, “All criminal proceedings arising under the internal revenue laws.”
The basic authorization structure survived the reorganization. IRS-CI still refers; a centralized DOJ component still authorizes, and a U.S. Attorney’s Office still prosecutes. What changed is which component holds the authorization power. The Justice Manual’s Title 6 chapters and parts of the Internal Revenue Manual still refer to the Tax Division and have not been conformed to either reorganization, so a reader checking those sources will find text that no longer describes the department.
The practical point for a taxpayer is unchanged. A second institution outside the IRS reviews the case independently before charges are authorized.
A federal grand jury decides whether probable cause supports the charges. That standard is lower than the proof beyond a reasonable doubt required for conviction. A grand jury can return the indictment as proposed, return different charges supported by the evidence presented, or decline to indict, though declinations at this stage are uncommon.
Grand jury proceedings are secret, and the scope of that secrecy is narrow. Federal Rule of Criminal Procedure 6(e)(2)(B) lists who may not disclose grand jury matters: jurors, interpreters, court reporters, recording operators, transcribers, government attorneys, and certain persons receiving disclosures. Rule 6(e)(2)(A) states that no obligation of secrecy may be imposed on anyone outside that list. Witnesses are not on it. A grand jury witness in a tax case may tell their own attorney what they were asked.
Indictments may be sealed at first so that arrests can be coordinated. Once unsealed, the case becomes a public prosecution with arraignment, bail, and discovery.
Standard federal criminal procedure takes over. You have the right to counsel, to confront witnesses, to present evidence, and to a speedy trial. Discovery gives the defense the government’s evidence, which often reveals weaknesses in a long financial investigation.
On timing, the widely repeated “70 days from indictment” is close but imprecise. 18 U.S.C. § 3161(c)(1) requires trial to commence within seventy days from the filing and making public of the indictment or information, or from the defendant’s first appearance before a judicial officer of the charging court, whichever is later. On a sealed indictment, the clock does not start at filing. Section 3161(h) excludes substantial categories of delay, and in a complex tax case the seventy days is rarely the real schedule.
Most federal criminal tax cases resolve by plea rather than trial. The chapter on criminal tax penalties and sentencing covers how tax loss, acceptance of responsibility, and cooperation affect the sentence.
IRS-CI reported an 89% conviction rate for fiscal year 2025. That figure is measured against cases that reach adjudication. It does not mean 89% of people investigated are convicted.
The published FY2025 numbers, from IRS Publication 3583, IRS-CI Annual Report 2025:
| Measure | FY2025 | FY2024 | FY2023 |
|---|---|---|---|
| Investigations initiated | 2,792 | 2,667 | 2,676 |
| Prosecution recommendations | 2,043 | 1,794 | 1,838 |
| Informations and indictments | 1,726 | 1,669 | 1,676 |
| Defendants sentenced | 1,613 | 1,582 | 1,479 |
| Incarceration rate | 76% | 76% | 79% |
| Average months to serve | 49 | 44 | 48 |
These figures describe FY2025 activity, not one cohort of cases tracked from initiation to outcome. IRS-CI initiated 2,792 investigations, referred 2,043 cases for prosecution, and reported 1,613 defendants sentenced during the fiscal year, but the investigations initiated that year are not necessarily the same investigations that produced that year’s referrals or sentences. Those can come from cases opened in earlier years. Of the defendants sentenced, 76% were incarcerated for an average of 49 months. IRS-CI also reported identifying almost $4.5 billion in tax fraud and more than $6 billion in other financial crime in FY2025.
The report does not publish the denominator behind the 89% figure, and the number is not derivable from the statistics it does publish. Treat it as IRS-CI’s own reported measure of cases it takes to judgment.
At three points, in this order: before IRS-CI recommends prosecution, before DOJ authorizes charges, and before the grand jury returns an indictment. Defense opportunities generally narrow as the matter moves from investigation to authorization to indictment.
Two things are worth knowing now rather than later.
Statements can create some of the most difficult problems for a taxpayer under investigation. A subject interview is voluntary and non-custodial, which means no warnings are required beyond the IRS-CI script, and no one will stop you from talking. People who believe they have done nothing wrong are at particular risk, because an inaccurate statement to a federal agent creates exposure independent of the tax charge.
Voluntary disclosure is narrower than commonly described. The IRS Voluntary Disclosure Practice under IRM 9.5.11.9 requires that the disclosure be received before the IRS commenced a civil examination or criminal investigation, or acquired information about the noncompliance from a third party or an enforcement action.
Once IRS-CI commences a criminal investigation, the voluntary disclosure window closes. The practice can also become unavailable earlier if the IRS already received qualifying third-party information or acquired information through an enforcement action.
Where a disclosure does qualify, it requires payment in full of tax, interest, and applicable penalties, and the IRS states plainly that it “does not guarantee immunity from prosecution.” The IRS announced a proposed overhaul of the practice in December 2025 that has not been finalized, so the current framework governs and is subject to change.
The chapter on early intervention covers what defense counsel can do at each of these points in detail.
Criminal tax law is federal, so the process above is the same in Michigan as anywhere else. Two things are local.
Venue is federal and depends on your county. Under 28 U.S.C. § 102, Michigan is divided into two judicial districts. Wayne, Oakland, Macomb, Washtenaw, Livingston, Genesee, and Monroe are in the Eastern District of Michigan, which sits in Detroit, Ann Arbor, Flint, Port Huron, and Bay City. Kent, Ottawa, Kalamazoo, Ingham, Grand Traverse, and the western and northern counties fall in the Western District, which sits in Grand Rapids, Kalamazoo, Lansing, Traverse City, Marquette, and Sault Ste. Marie. Lansing sits in the Western District, which surprises people.
State exposure runs in parallel. The Tax Enforcement Unit within the Michigan Department of Treasury’s Discovery and Tax Enforcement Division investigates and prosecutes state tax fraud with the Michigan State Police and the Attorney General. A federal resolution does not bind the State of Michigan, and conduct that produces a federal charge frequently has a state analog.
If a special agent has contacted you, if you received a summons signed by one, or if a civil audit has gone silent, the useful step is a confidential conversation before you speak with anyone at the IRS. Ayar Law defends federal criminal tax matters in both Michigan federal districts.
Request a confidential case review or call (248) 262-3400.
This page is general information about federal criminal tax procedure. It is not legal advice, and reading it does not create an attorney-client relationship. Criminal tax outcomes depend on facts specific to each matter, and no result is promised or implied. Federal law and Department of Justice organization change; the authorities cited were current as of September 2026. Consult a licensed attorney about your situation.
