IRS Criminal Tax Investigations: What Are They Looking For?

fraud investigationNo one enjoys hearing from the Internal Revenue Service (IRS) unless it is about a refund. Audit letters can be concerning, but an IRS criminal tax investigation can change your future.


It is obvious that the IRS is looking for tax fraud, evasion, and scams. IRS Criminal Investigations (IRS: CI) cover a large swath of financial malfeasance and the breadth of their mandate is impressive. Consider the areas of investigation that IRS: CI considers for its audits and investigations:

  • Preparer fraud: Tax preparer fraud takes many forms, including identity theft, filing fraudulent tax returns, claiming of false deductions, tax credits, and more.
  • Tax schemes: Illegal and abusive tax schemes are an important focus for the IRS. These schemes may relate to foreign bank accounts or offshore tax holdings, or shell companies used to launder money and other violations of the Bank Secrecy Act (BSA). The IRS also investigates healthcare fraud involving fake billings for services, patient kickbacks, and a variety of healthcare industry frauds. The IRS is also routinely involved in enforcement activities involving non-filers and those who claim and receive fraudulent tax refunds.
  • Bankruptcy scams: Bankruptcy actions sometimes involve tax fraud. The IRS can be a major creditor in these proceedings. If considering bankruptcy to eliminate tax debt, speak first with a tax attorney experienced with the IRS and bankruptcy actions. Existing tax liens are not likely to be removed—so be aware of your options before your file, the IRS reviews bankruptcy filings carefully.
  • Corporate tax fraud: The IRS routinely reviews corporate returns for accuracy and fraud. A corporate audit can lead to individual tax audits as well. A corporate audit may initiate an employment tax dispute which could be evaluated on a criminal basis if employee withholdings were not properly paid over. The IRS may initiate investigations to evaluate corporate or individual fraud involving financial institutions and other business entities.
  • Drug-related investigations: The IRS partners with other agencies to track and provide financial information and leads relating to narcotics investigations.


The IRS also partners with other government agencies to identify and investigate corruption of public officials, elected or appointed. 


If your company is involved in any flavor of these types of fraud activities, or if you are aware of issues with your personal income tax returns—speak with a tax attorney familiar with criminal tax investigations soon. Experienced legal guidance can sometimes deter charges or obtain the best outcome for your circumstances.


Experienced tax lawyers help you with tax controversy and audit outcomes

Representing domestic and international clients, the tax attorneys at Robert J. Fedor, Esq., LLC provide strong representation on matters of criminal tax defense, FBAR issues, and tax litigation. Call 800-579-0997 or contact us today.


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