What Triggers an IRS Criminal Investigation?

An IRS criminal investigation can be triggered when it suspects you have committed tax fraud. There are several ways in which the IRS can develop a suspicion of tax fraud, but each has the same potential to lead to an investigation. Red flags include omissions of your income on your tax return, document destruction, and if you are being investigated by another law enforcement agency, among others.

If you are facing a high-stakes tax problem, the attorneys at Ayar Law can help you protect your property and your freedom from unreasonable IRS and state tax collection. Contact us today for a free, no-obligation consultation on your tax issues. There’s no need to face these issues alone.

Red Flags that the IRS is Trained to Spot

Several red flags could indicate to the IRS that tax fraud is an issue. Here is a non-exhaustive list:

  • An IRS officer or agent suspects you have committed fraud and will forward your information to an investigator.
  • If you are being investigated by another law enforcement agency, it may reveal information that causes the IRS to become suspicious.
  • Someone from the public may have informed the IRS that you are committing tax fraud, and the IRS could decide to initiate a criminal investigation.
  • Information gathered during a civil audit leads to suspicions of tax fraud.

Clues the IRS is Seeking

If the IRS decides to investigate you for tax fraud or tax evasion, it will seek to build the strongest case possible. The IRS’s goal is to secure a conviction or a plea deal. Here are some of the types of clues–and examples of each–that the IRS will be pursuing during its investigation:

  • Substantive clues include omissions of your income on your tax return, exaggerated deductions on your tax return, hiding bank accounts, or failing to file required forms.
  • Behavioral clues include procrastinating the filing of your taxes, lack of cooperation with the IRS, sudden changes or alterations, being concerned about your case concluding as soon as possible, document destruction, and transferring revenue, assets, or income.

What Causes an IRS Agent to Refer Your Case for Criminal Investigation?

For an IRS agent to submit your case to a criminal investigator, there must be substantial evidence that you committed a tax crime. The IRS understands how complicated and confusing tax laws can be, so it does not automatically assume that every error is a sign of fraud.

IRS agents are trained to spot the difference between a routine correction, an honest error, and criminal activity. The taxpayer’s intention is often a crucial determining factor in whether or not to file criminal charges. In other words, you must have intentionally violated tax laws. For example, when you filed your taxes, you knew you owed substantially more federal taxes but were attempting to avoid paying them.

What Should I Do Next?

If you are concerned that the IRS may criminally investigate you, consult with an experienced tax fraud attorney as soon as possible. The potential financial, social, and quality-of-life ramifications are steep. So, it needs to take this seriously.

Schedule a Free Consultation Today

At Ayar Law, our attorneys represent clients facing high-stakes tax problems. We have been strong advocates for taxpayers against the IRS since 2012, and our extensive experience has enabled us to understand how the IRS works. Call us today to schedule a free, no-obligation consultation if you are concerned about a criminal investigation.