From the Tax Law Offices of David W. Klasing - Are IRS Tax Audits, Enforcement Actions, and Investigations Civil or Criminal?

IRVINE, Calif., Sept. 26, 2024 /PRNewswire/ -- Something can be "illegal" for tax purposes but does not typically turn criminal and many financial crimes and federal tax controversy issues come up against this line, dancing on both sides for months or years before finally landing on one side or the other. When it comes to IRS enforcement, you might see plenty of criminal and civil issues cross over and back. For example, conservation easements and Micro Captive Self-Insurance deductions have been around for decades without being subject to much civil or criminal tax enforcement action. Today these are both being heavily targeted by the civil and criminal functions (Criminal Investigation) of the IRS. 

IRS audits often start as civil matters, giving you and your attorney plenty of time to address the matters before you and resolve the case through negotiations, payment of back taxes, and payment of penalties and interests. However, IRS audits can turn criminal, resulting in pending charges. In many cases, we can keep a case in the "civil" category through clever lawyering and cooperation with the IRS even where you have a history of blatant cheating.

For a reduced rate initial consultation on your IRS audit or criminal tax investigation, call the Tax Law Offices of David W. Klasing's Dual Licensed Tax Attorneys and CPAs at (800) 681-1295 or schedule online today.

Is the IRS Supposed to Go Straight to Criminal Charges for Tax Issues?

Generally, the IRS has the option of taking civil actions against you in place of pursuing criminal tax charges. This is often easier and cheaper for the government, and less resource-intensive, and it may get the government's goals accomplished without the need to put you through the life altering hassle and the serious repercussions of criminal tax prosecution.

What Civil Steps Can the IRS Take Against Me?

The IRS' typical goals during a straight civil audit are typically just to assess the taxes they are properly owed with minimal interference to taxpayer's lives. Typically, this involves a modicum of "restraint" rather than going straight to a criminal tax investigation and the seeking evidence of badges of fraud obtained through undisclosed search warrants and the like. Instead, the IRS ordinarily uses the ample civil tools at its disposal to detect and correct fraud and other associated tax crimes, most of the time, choosing to resolve them civilly:

Audits

Most audits are not criminal in nature from the outset; however, they can result in the discovery of serious criminal tax issues. The IRS resolves most audits through the assessment of tax, penalties and interest. Our Dual Licensed Tax Attorneys and CPAs have decades of experience and a long track record of success in guiding taxpayers through high-risk audits, defending taxpayer's net worth and their very liberty along the way and resolve audits quickly and civilly before they turn into something tremendously more serious.

Collections/Liens

Tax liens and levies, wage garnishments, asset seizures, and similar enforcement mechanisms are routinely used to get the money they have assessed, ordinarily without investigating criminal tax charges or seeking an indictment. But, beware of criminal charges that can be sought where a taxpayer evades a collection action.

Injunctions

The IRS and other government agencies can file for injunctions to stop tax evasion and other malfeasance, stopping any perceived harm while they explore other options to deal with the perceived abuse. This often puts things on hold and interferes with your financial freedom and can be a precursor to the IRS seeking to put you in jail.

Clandestine IRS Use of Parallel Proceedings

In some instances, the government can pursue both a civil and a criminal course at once, by first filing for civil injunctions but at the same time initiating a criminal tax investigation. In the simplest terms, they may try to have their cake and eat it, too, when it comes to how they approach your tax compliance issues. This can also occur in a reverse eggshell audit where the criminal investigation department is cloaking a criminal tax investigation as a straight civil audit at least from its outset.

Our dually licensed tax audit defense attorneys & CPAs can help stave off the criminal side of the investigation by cooperating with the civil side of the investigation, with the goal of cooperating in a manner that the IRS is able to pursue its goal of getting you back into tax compliance while discouraging the IRS from attacking your very liberty and net worth by seeking a criminal tax indictment.

Can I Get a Criminal Case with the IRS Handled Civilly?

Our goal as your tax attorneys will always be to resolve your tax controversy in the most cost-efficient manner balanced against our mutual desires of keeping you out of criminal tax trouble at all costs. There are often plenty of tools at our disposal to get your audit resolved as a purely civil matter and discourage the IRS from turning any detected criminal tax noncompliance into a prosecutable criminal tax matter. To date, we have a 100% success rate at just that.

Cooperating with the IRS's efforts to return you to tax compliance, prompt payment where possible, and filing true accurate and complete returns going forward can all help alleviate the enormous pressure on you and get the IRS what they want, giving them little excuse to investigate further any potential criminal tax compliance detected during your audit. If you cooperate and work with an appropriately trained, experienced and preeminently qualified dually licensed Tax Attorney & CPA who can handle the negotiations, there is often little need for the IRS to go beyond purely civil proceedings.

On the other hand, If the IRS does begin and complete a criminal tax investigation, they have a 90% conviction rate. Suppose the IRS does opt for the nuclear option and insists on completing a criminal tax investigation with the goal of seeking an indictment against you. At that point in time its statistically improbable that we, or any law firm, can prevent you from facing federal jail time although we have experience at achieving damage control in the past where we either achieved a declination for our clients or ensured the lightest sentence possible under the circumstances. 

Call Our Dual Licensed Tax Attorneys and CPAs Today

Schedule a reduced rate initial consultation with our Dual Licensed Tax Attorneys and CPAs at Tax Law Offices of David W. Klasing by calling (800) 681-1295 or clicking the following link to schedule online right away.

See our Audit Representation Q and A Library 
See our Criminal Tax Law Q and A Library 
See our Non-Filer Q and A Library
See our Foreign Audit Q and A Library 
See our Civil and Criminal Divorce Tax Law Q and A Library

Public Contact: Dave Klasing Esq. M.S.-Tax CPA, [email protected]

SOURCE Tax Law Offices of David W. Klasing, PC