Whether or not you believe the Internal Revenue Service (IRS) has reason to launch a criminal tax investigation into you or your business, recognizing signs that the IRS is showing interest is key to how and when you respond.
Civil tax violations are more common than criminal tax allegations. That said, in 2025, according to the IRS Criminal Investigation (IRS-CI) Annual Report, there were 1,380 investigations into tax crime, 834 recommendations for prosecution, and 589 defendants sentenced. In the same year, there were 1,153 investigations launched regarding money laundering, with 2,313 seizures and 994 forfeitures. Federal tax crimes are happening all the time, and so are IRS criminal investigations.
Common signs of an IRS Criminal Investigation
While some signs of an IRS investigation are obvious, others can be much more subtle. Taken together, the following indicators and red flags may suggest heightened IRS scrutiny:
- If you are involved in an IRS audit and the examiner pauses your audit, or communication or correspondence drops off before the audit is complete, this could indicate that the examiner may believe they have identified evidence of tax fraud.
- The IRS may interview the circle of people around you, such as your accountant, ex-spouses, business associates, or employees, or they may subpoena or obtain search warrants for bank and other records. While a family member might tell you that the IRS reached out to them, others may not. Interviews of this nature concerning your financial profile and lifestyle habits should be considered signs of an IRS investigation.
- If you receive an audit letter for years in which you are aware there are reporting issues or conduct that could raise concerns, such as tax evasion, be sure to obtain criminal tax defense before responding to the audit. These types of audits are often known as “eggshell audits,” when either you, the IRS, or both know your tax returns or Report of Foreign Bank Accounts (FBAR) filings are problematic. An interview summons or other escalation of the audit process may indicate the matter is becoming more serious.
- IRS Special Agents are responsible for investigating potential criminal violations of the tax laws. They can carry firearms; they conduct financial, digital, and physical surveillance, and you may notice agents following or photographing you.
- Be aware that by the time you receive a letter or visit from an IRS Special Agent, the IRS may have been collecting information on you or your business activities for some time. Regardless of how well you feel you can deal with the IRS, do not respond to questions or speak to an IRS Special Agent without first speaking with a criminal tax defense attorney.
Any of these signs could be a warning sign of potential criminal allegations to come. If contacted by an IRS Special Agent, proceed carefully. Do not provide false information and do not voluntarily turn over documents before fully understanding the nature of the investigation and your rights.
Concerned about criminal tax charges?
Our legal group has significant, successful experience working with clients facing allegations of criminal tax violations and civil tax matters. Whether you contact our firm or another, do not delay getting decisive legal advice before responding to the IRS. We work with clients internationally and across the U.S. in all stages of criminal tax investigations, and those who have already been charged. Contact Robert J. Fedor, Esq., LLC, at 440-250-9709 for guidance.
If you want a better look right now at the factors that make up a criminal tax charge, download our resource guide, Will I Be Charged with Criminal Tax Fraud? Regardless of the anxiety it may provoke, remember that solid information is a good thing. Forewarned is forearmed.
