Signs the IRS is Investigating You and What to Do - 2024 - FEDERAL LAWYERS [2024] (2024)

Contents

  • 1 Signs the IRS is Investigating You and What to Do
    • 1.1 How Investigations Get Started
    • 1.2 Signs You May Be Under Investigation
    • 1.3 If IRS Agents Come Knocking
    • 1.4 Your Defense Strategy
    • 1.5 Avoiding Criminal Charges
    • 1.6 The Bottom Line
    • 1.7 References

Dealing with the IRS can be scary. An audit or investigation can make anyone feel anxious. But there are things you can do to protect yourself and your rights if you find yourself on the IRS’s radar. This article will go over the common signs that the IRS may be looking into your taxes, plus give advice on steps to take if you suspect you’re being investigated.

How Investigations Get Started

There are a few different ways an IRS investigation can begin[1]:

  • Information from an IRS auditor or revenue officer
  • Tips from informants
  • Data mining of tax returns
  • Related investigations of other taxpayers

Signs the IRS is Investigating You and What to Do - 2024 - FEDERAL LAWYERS [2024] (1)

So an investigation might start if an auditor sees something suspicious during a routine audit. Or it could be triggered by someone reporting potential tax fraud. The IRS also uses computers to search for anomalies in tax returns that may indicate a problem. And if they’re already looking into one taxpayer, that could lead them to start investigating associated people or businesses as well.

Signs You May Be Under Investigation

Many times the IRS won’t tell you directly that you’re under criminal investigation. But there are signs you can watch out for[2][3][4][5]:

  • IRS agents suddenly stop contacting you after requesting information or asking you to pay taxes owed
  • Your IRS auditor seems to disappear without explanation
  • You or your bank gets subpoenaed for financial records
  • You stop getting the typical notices the IRS sends for things like penalties and interest
  • You get a surprise visit from IRS criminal investigation agents
  • Friends, family, business associates start getting contacted by the IRS

Some other red flags are if you submitted amended tax returns to correct errors, or if you failed to file for multiple years. While one mistake doesn’t necessarily mean you’re being looked at for criminal charges, patterns of behavior can draw scrutiny.

If IRS Agents Come Knocking

If IRS criminal investigators come to your home or place of business, you need to be very careful in how you respond. Here are some tips:

  • Don’t answer any questions right away. Politely state you need to consult with a tax attorney first.
  • Don’t invite them into your home or office. Step outside and close the door behind you if needed.
  • Don’t sign any documents without reviewing them carefully and having a lawyer assist you.
  • Take the agents’ business cards and write down their names and badge numbers.
  • Contact a criminal tax defense lawyer immediately.

Anything you say to IRS investigators can potentially be used against you later on. So it’s crucial you don’t answer questions or volunteer information before speaking to an attorney. Be cooperative, but protect yourself first.

Signs the IRS is Investigating You and What to Do - 2024 - FEDERAL LAWYERS [2024] (2)

Christine Twomey

2024-03-21

Just had my Divorce case settled 2 months ago after having a horrible experience with another firm. I couldn’t be happier with Claire Banks and Elizabeth Garvey with their outstanding professionalism in doing so with Spodek Law Group. Any time I needed questions answered they were always prompt in doing so with all my uncertainties after 30 yrs of marriage.I feel from the bottom of my heart you will NOT be disappointed with either one. Thanks a million.

Alex Zhik contacted me almost immediately when I reached out to Spodek for a consultation and was able to effectively communicate the path forward/consequences of my legal issue. I immediately agreed to hire Alex for his services and did not regret my choice. He was able to cover my case in court (with 1 day notice) and not only was he able to push my case down, he carefully negotiated a dismissal of the charge altogether. I highly recommend Spodek, and more specifically, Alex Zhik for all of your legal issues. Thanks guys!

Signs the IRS is Investigating You and What to Do - 2024 - FEDERAL LAWYERS [2024] (4)

Guerline Menard

2024-03-18

Thanks again Spodek law firm, particularly Esq Claire Banks who stood right there with us up to the finish line. Attached photos taken right outside of the court building and the smile on our faces represented victory, a breath of fresh air and satisfaction. We are very happy that this is over and we can move on with our lives. Thanks Spodek law 🙏🏼🙏🏼🙏🏼🙏🏼🙌🏼❤️

Signs the IRS is Investigating You and What to Do - 2024 - FEDERAL LAWYERS [2024] (5)

Keisha Parris

2024-03-15

Believe every single review here about Alex Z!! From our initial consultation, it was evident that Alex possessed a profound understanding of criminal law and a fierce dedication to his clients rights. Throughout the entirety of my case, Alex exhibited unparalleled professionalism and unwavering commitment. What sets Alex apart is not only his legal expertise but also his genuine compassion for his clients. He took the time to thoroughly explain my case, alleviating any concerns I had along the way. His exact words were “I’m not worried about it”. His unwavering support and guidance were invaluable throughout the entire process. I am immensely grateful for Alex's exceptional legal representation and wholeheartedly recommend his services to anyone in need of a skilled criminal defense attorney. Alex Z is not just a lawyer; he is a beacon of hope for those navigating the complexities of the legal system. If you find yourself in need of a dedicated and competent legal advocate, look no further than Alex Z.

Signs the IRS is Investigating You and What to Do - 2024 - FEDERAL LAWYERS [2024] (6)

Taïko Beauty

2024-03-15

I don’t know where to start, I can write a novel about this firm, but one thing I will say is that having my best interest was their main priority since the beginning of my case which was back in Winter 2019. Miss Claire Banks, one of the best Attorneys in the firm represented me very well and was very professional, respectful, and truthful. Not once did she leave me in the dark, in fact she presented all options and routes that could possibly be considered for my case and she reinsured me that no matter what I decided to do, her and the team will have my back and that’s exactly what happened. Not only will I be liberated from this case, also, I will enjoy my freedom and continue to be a mother to my first born son and will have no restrictions with accomplishing my goals in life. Now that’s what I call victory!! I thank the Lord, My mother, Claire, and the Spodek team for standing by me and fighting with me. Words can’t describe how grateful I am to have the opportunity to work with this team. I’m very satisfied, very pleased with their performance, their hard work, and their diligence.Thank you team!

Signs the IRS is Investigating You and What to Do - 2024 - FEDERAL LAWYERS [2024] (7)

Anthony Williams

2024-03-12

Hey, how you guys doing? Good afternoon my name is Anthony Williams I just want to give a great shout out to the team of. Spodek law group. It is such a honor to use them and to use their assistance through this whole case from start to finish. They did everything that they said they was gonna do and if it ever comes down to it, if I ever have to use them again, hands-down they will be the first law office at the top of my list, thank you guys so much. It was a pleasure having you guys by my side so if you guys ever need them, do not hesitate to pick up the phone and give them a call.

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Loveth Okpedo

2024-03-12

Very professional, very transparent, over all a great experience

Signs the IRS is Investigating You and What to Do - 2024 - FEDERAL LAWYERS [2024] (9)

Bee L

2024-02-28

Amazing experience with Spodek! Very professional lawyers who take your case seriously. They treated me with respect, were always available, and answered any and all questions. They were able to help me very successfully and removed a huge stress. Highly recommend.

Signs the IRS is Investigating You and What to Do - 2024 - FEDERAL LAWYERS [2024] (10)

divesh patel

2024-02-24

I can't recommend Alex Zhik and Spodek Law Firm highly enough for their exceptional legal representation and personal mentorship. From the moment I engaged their services in October 2022, Alex took the time to understand my case thoroughly and provided guidance every step of the way.Alex's dedication to my case went above and beyond my expectations. His expertise, attention to detail, and commitment to achieving the best possible outcome were evident throughout the entire process. He took the time to mentor me, ensuring I understood the legal complexities involved to make informed decisions. Alex is the kind of guy you would want to have a beer with and has made a meaningful impact on me.I also want to acknowledge Todd Spodek, the leader of the firm, who played a crucial role in my case. His leadership and support bolstered the efforts of Alex, and his involvement highlighted the firm's commitment to excellence.Thanks to Alex Zhik and Todd Spodek, I achieved the outcome I desired, and I am incredibly grateful for their professionalism, expertise, and genuine care. If you're in need of legal representation, look no further than this outstanding team.

Google rating score: 4.9 of 5, based on 736 reviews

Your Defense Strategy

If you are contacted by IRS criminal agents or have reason to think you’re under investigation, your next steps are important. Here are some key points:

  • Hire an experienced criminal tax lawyer. You need someone who understands IRS procedures and investigations.
  • Don’t try to handle this alone. A tax attorney can deal with the IRS on your behalf.
  • Have your lawyer find out details of the investigation, including the special agent assigned to your case.
  • Develop a defense strategy with your attorney focused on your specific situation.
  • Follow your lawyer’s advice about whether to meet with investigators, provide documents, etc.

Some potential defenses your attorney may use:

  • You acted in good faith and had no intent to break tax laws.
  • It was a legitimate misunderstanding of confusing IRS rules.
  • Someone else prepared your return and you were unaware of any false information.
  • You had no knowledge of any wrongdoing within your business.

Your lawyer’s familiarity with tax law and investigative procedures will be invaluable in mounting the best defense. They can also negotiate with the IRS on your behalf if needed.

Avoiding Criminal Charges

To avoid facing criminal tax charges, the best thing you can do is be honest and compliant with the IRS:

  • File all tax returns on time, even if you can’t pay in full.
  • Keep thorough records to support figures on your returns.
  • If you discover an error, file an amended return ASAP.
  • Stay organized and retain tax documents for at least 3 years.
  • Pay as much as you can, or work out a payment plan, if you have a balance due.

Also make sure any tax professionals you use are reputable and know tax code well. While the IRS still may audit you if you follow these practices, you’re less likely to trigger a criminal investigation.

The Bottom Line

Dealing with IRS inquiries and investigations is stressful. But there are things you can do to protect yourself, like consulting with a tax attorney right away. Be smart, know your rights, and don’t panic. With the right help, you can get through it.

References

[1] https://www.irs.gov/compliance/criminal-investigation/how-criminal-investigations-are-initiated

Signs the IRS is Investigating You and What to Do - 2024 - FEDERAL LAWYERS [2024] (11)

Signs the IRS is Investigating You and What to Do - 2024 - FEDERAL LAWYERS [2024] (12)

[2] https://www.marca.com/en/lifestyle/us-news/personal-finance/2023/05/29/6474b5e2ca4741ef0b8b45cb.html

[3] https://klasing-associates.com/criminal-tax-defense/irs-criminal-investigations/

[4] https://landmarktaxgroup.com/irs-back-taxes/taxes-and-criminal-consequences-what-you-need-to-know-about-irs-criminal-investigations

[5] https://www.floridataxlawyers.com/how-to-tell-if-irs-is-investigating-you

Signs the IRS is Investigating You and What to Do - 2024 - FEDERAL LAWYERS [2024] (2024)

FAQs

Signs the IRS is Investigating You and What to Do - 2024 - FEDERAL LAWYERS [2024]? ›

Signs You May Be Under Investigation

Will you know if the IRS is investigating you? ›

Signs of an IRS Criminal Investigation

This could involve frozen accounts, banks refusing transactions without clear reasons, or inquiries from financial institutions about specific transactions. The IRS may issue summonses to banks to collect information about your financial activities as part of their investigation.

What triggers an IRS criminal investigation? ›

When the government suspects that a taxpayer has willfully attempted to evade reporting taxable income or paying taxes that they owe, they may follow up with an audit or even skip right to the criminal investigation stage.

What types of crimes does the IRS investigate? ›

The Internal Revenue Service Criminal Investigation Division conducts criminal investigations regarding alleged violations of the Internal Revenue Code, the Bank Secrecy Act and various money laundering statutes. The findings of these investigations are referred to the Department of Justice for recommended prosecution.

How long do IRS investigations take? ›

6-12 months – IRS conducts formal criminal investigation. 1-3 months – IRS Chief Counsel reviews findings. 12-18 months – DOJ handles prosecution.

How do you know if the IRS is looking for you? ›

Should your account be selected for audit, we will notify you by mail. We won't initiate an audit by telephone. Assistance is available to help you understand the letter/notice received: Understanding your IRS notice or letter.

How do I know if CID is investigating me? ›

Signs that the CID might be investigating you

Interviews with acquaintances: Friends, colleagues, or family members may inform you they've been questioned about your activities. Social media and email scrutiny: Expect that your digital footprint is being monitored if under investigation.

What triggers a federal investigation? ›

If a crime is brought to the attention of federal authorities, whether by a victim of the crime or a witness to it (e.g., a bank robbery), a federal law enforcement agency will undertake an investigation to determine whether a federal offense was committed and, if so, who committed it.

What is considered suspicious activity to the IRS? ›

A false or altered document. Failure to pay tax. Unreported income. Organized crime.

What triggers a criminal investigation? ›

In determining the course of investigation, many law enforcement organizations use three "indicators of suspicion" describing potential suspects, jointly known as MMO: means to commit the crime (including tools and physical capabilities) motive to commit the crime (for example, financial gain or to seek revenge)

Who does the IRS send to jail? ›

You can face jail time for criminal tax fraud or evasion. Criminal tax evasion includes willful attempts to illegally avoid paying taxes. Criminal tax fraud includes filing false tax documents or concealing information from the IRS. The IRS uses civil fraud penalties to deal with most cases of tax fraud.

What is the conviction rate for IRS criminal investigation? ›

IRS-CI special agents are the only federal law enforcement agents with investigative jurisdiction over violations of the Internal Revenue Code, boasting a nearly 90 percent federal conviction rate.

What makes IRS suspicious? ›

Excessive deductions

The IRS will compare your itemized deductions to the average total deductions for a given item claimed by other taxpayers who are in the same income range as you. A taxpayer whose deductions appear to exceed these averages may be further scrutinized by the IRS.

How will I know if the IRS is investigating me? ›

Signs You May Be Under Investigation

Your IRS auditor seems to disappear without explanation. You or your bank gets subpoenaed for financial records. You stop getting the typical notices the IRS sends for things like penalties and interest. You get a surprise visit from IRS criminal investigation agents.

How long do most federal investigations take? ›

Federal investigations can last anywhere from a few months to several years, depending on the complexity and severity of the alleged crime. You have the right to a speedy trial under the Sixth Amendment, but this right typically applies after formal charges have been filed, not during the investigation stage.

What triggers an IRS investigation? ›

Taxable income that is not reported on your tax return is likely to trigger an IRS audit. Common kinds of unreported income include: Income from a hobby or side hustle.

Can the IRS audit you without you knowing? ›

The interview may be at an IRS office (office audit) or at the taxpayer's place of business, or accountant's office (field audit). IRS employees conducting audits may call taxpayers, but not without having first attempted to notify them by mail.

How do you know if you are in trouble with the IRS? ›

When we charge you a penalty, we send you a notice or letter by mail. The notice or letter will tell you about the penalty, the reason for the charge and what to do next. These notices and letters include an identification number. Verify the information in your notice or letter is correct.

How do you know if the IRS flagged your return? ›

Taxpayers whose tax returns have been flagged for possible IDT should receive one of the following letters: Letter 5071C, Potential Identity Theft during Original Processing with Online Option – Provides online and phone options and is issued most widely.

How do you know if the IRS is reviewing your return? ›

If the IRS decides that your return merits a second glance, you'll be issued a CP05 Notice. This notice lets you know that your return is being reviewed to verify any or all of the following: Your income. Your tax withholding.

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