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How Do Criminal Investigations Work for Tax Evasion Cases?

IRS Tax Evasion

No one likes to pay taxes, but most of the efforts people make to reduce their tax burden do not rise to the level of federal crimes. If you try to pass off your anniversary dinner as a business expense, the worst penalty you are likely to receive is a salty look from your tax accountant. 

People make mistakes on their taxes, and when this draws the attention of auditors, the IRS simply sends you a letter asking you to pay the additional amounts that you owe. The IRS accepts payments in installments, and in rare circumstances where the taxpayer has suffered an unavoidable financial hardship after incurring the tax debt, it may even be willing to settle the debt for less than the amount that the taxpayer originally owed. 

You can only get criminal charges for not paying taxes if the federal government accuses you of tax evasion, which is a form of fraud because it involves the defendant lying to the government about his or her financial situation. As with any federal crime, the charges only come after an investigation by the Department of Justice or other federal agencies. 

Contact a Texas white-collar crime lawyer at The Law Office of Patrick J. McLain, PLLC, if you are facing criminal charges for tax evasion.

What Causes an IRS Special Agent to Initiate a Tax Evasion Investigation?

You are probably familiar with tax audits, where the IRS reviews your tax return more carefully than it reviewed it the first time and asks you to send additional evidence to corroborate the statements you made on your tax returns. Still, those are not the only kinds of investigations that take place at the IRS. A criminal investigation into possible tax evasions begins when one of the following parties notifies an IRS special agent of possible discrepancies or suspicious activity:

● A revenue agent in charge of auditing tax returns

● A revenue officer in charge of collecting taxes

● A police department, sheriff’s office, or U.S. Attorney’s office that found evidence of tax evasion while it was investigating another crime

● A tip from a member of the public

Based on the tips they receive from within the IRS or from outside sources, the IRS special agents conduct a preliminary analysis called a primary investigation. If they do not find strong evidence of tax evasion, the investigation ends here, and the taxpayer does not get charged with a crime. If they find sufficient evidence, though, the IRS special agents will begin a subject criminal investigation. During the subject criminal investigation, investigators may ask any parties with relevant information about the case to provide it. They can obtain search warrants for places where the taxpayer’s money or financial records may be kept, or they can ask the court to issue a subpoena for bank records or other documents.

Contact The Law Office of Patrick J. McLain, PLLC, About Tax Evasion Cases

You should hire a Dallas, TX, criminal defense lawyer if you are being accused of tax evasion. Contact The Law Office of Patrick J. McLain, PLLC, to discuss your case.

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