The arrival of tax season may be a stressful time for many business owners and individual filers. IRS criminal investigators continue to aggressively pursue tax evaders, and IRS efforts have increased with additional manpower and funding. These agents have particularly been focusing, in recent months, on investigations regarding tax evasion, cryptocurrency under-reporting, tax return preparer liability, and COVID-19/ERC fraud.
Tax-related crimes take form in a variety of ways. These include:
- Underreporting income;
- Submitting false documents;
- Failing to pay tax liability or file tax returns;
- Refusing to properly account for cryptocurrency and other financial gains;
- Failing to accurately prepare tax returns for clients; and,
- Engaging in COVID-19 relief fraud, such as submitting fraudulent ERC applications.
IRS investigators have a wide-ranging set of tools to enforce the tax code. An individual who evades taxes can be subject to harsh civil and criminal penalties, including prison time as well as substantial fines. These are life-altering consequences that should not be taken lightly.
IRS investigators are highly skilled. Generally speaking, they can differentiate between those who cannot pay taxes or underreport due to honest mistakes vs. those who commit purposeful evasion. It is very important to consult a skilled attorney immediately if you are contacted by the IRS.
Matthew P. Massey is a Partner in the White Collar, Government Investigations, and Special Matters Group. He is a former Assistant U.S. Attorney with the U.S. Attorney’s Office for the District of Columbia. He represents businesses and individuals in high stakes matters including federal criminal defense and white collar crimes.