Are You a Candidate for an Eggshell Audit?

IRS auditAn “eggshell” audit is an IRS audit with potentially serious consequences. An eggshell audit is what it sounds like, a sensitive audit in which you hope the IRS does not look too closely at your financial dealings.


No one enjoys receiving correspondence from the Internal Revenue Service (IRS) requesting the pleasure of you and your financial books for an audit. For individuals with concerning financial circumstances—an unreported foreign bank account, payroll tax issues, or fraudulent income tax returns—the stress of an IRS audit is notched up.


During an eggshell audit, the taxpayer has knowledge of features in their financial profile upon which the IRS could pursue penalties, or worse, a criminal tax audit. The exercise is fraught with risk. If you are participating in an IRS civil audit and are asked specifically about a sensitive topic, it is critical to avoid lying to the IRS. While the agent may not yet understand the full scope of a tax fraud you might be hiding, making false statements to the IRS can quickly make the situation worse. Too often in these cases, taxpayer explanations get lengthy and facts become muddled. 


Even worse are audits called “reverse eggshell audits.” These audits are cat-and-mouse games where you can be reasonably certain that the IRS has access to potentially damaging information about which they are questioning you. In these scenarios, the examiner might be sharing information with another agent who has put together a dossier on offshore tax accounts you might not have mentioned on your last FBAR report.


Any interaction with the IRS should be approached cautiously. If your business or personal financial dealings have crossed the line, you will be out of your depth at the audit, and tempted to either lie or reveal every dark secret of your tax history.


Before any encounter with the IRS, speak with a seasoned criminal tax defense attorney with significant experience with the IRS. A skilled tax attorney can attend the audit and advise you on answers and strategies. If the audit goes south, a tax attorney can help you avoid self-incrimination while assisting you with options to meet the challenge and obtain the best possible results for the circumstances of your case. If you are involved in a civil audit and the IRS opens a criminal tax investigation during your examination, the IRS is obligated to inform you.


If you know there is a tax dodge on your books—speak with knowledgeable legal counsel before you speak to the IRS.


Skilled tax lawyers help you if you are facing an IRS audit or criminal tax charge

Serving local and international clients from offices in Chicago and Cleveland, the legal team at Robert J. Fedor, Esq., LLC delivers strong representation and guidance for those facing criminal tax litigation, employment tax disputes, or compliance questions. Call 800-579-0997 or contact us online today.


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