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Newsletter - Summer 2008
Seek Representation for IRS Criminal Investigations
Ronald Wise, Principal, Advisory Services |
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When a Special Agent of the IRS begins an interview by stating, "As a Special Agent, one of my functions is to investigate the possibilities of criminal violations of the Internal Revenue laws and related offenses.," it's safe to assume you are facing a complex situation involving much more than a potential income tax liability.
A good strategy should begin prior to the initiation of the criminal investigation and should include executing a power of attorney authorizing the IRS to deal directly with your representative- an attorney, accountant, enrolled agent or other professional. In most instances, a power of attorney will prohibit the IRS from contacting you directly. Your representative can provide the following services:
- Review your income tax situation and assess your potential risk of referral for criminal investigation.
- Monitor the actions of the IRS to assess the ongoing risk of a criminal referral.
- Develop strategies to minimize the possibility of a criminal referral, while at the same time avoiding actions that might enhance a criminal case in the event a criminal investigation is undertaken.
In those instances where it is apparent that a criminal investigation is imminent, you must consider the following:
- If you have not executed a power of attorney, the Special Agent will probably not call to make an appointment as “initial taxpayer interviews” are usually unannounced, often outside of normal working hours, and at any location where the Special Agent determines it to be advantageous to the investigation.
- Do not answer questions or provide documents to the Special Agent after being advised of your Constitutional rights as “anything you say and any documents you submit will be used against you.”
- If served with a summons or subpoena, provide a copy to your representative immediately.
- Obtain business cards from the Special Agents and provide them to your representative.
After the initiation of a criminal investigation, your representative will attempt the following on your behalf:
- Determine the nature of the investigation including the general allegations, type of investigation (administrative vs. grand jury), years under investigation, anticipated method of proof and information needed by the IRS.
- Determine what evidence has been documented during the investigation.
- Identify procedural and evidentiary problems of the investigation which might preclude prosecution by the Department of Justice.
- Determine whether documentary evidence should be voluntarily provided to the IRS.
A criminal tax case is a very complex issue that requires the expertise of a representative who understands income tax law, forensic accounting and most importantly, the policies, procedures and strategies of the IRS Criminal Investigation Division. Consult your criminal tax expert for advice and guidance before you find yourself on the receiving end of the "Advice of Rights."
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