IRS Criminal Investigation Defense Attorney

People treat IRS contact as a paperwork problem. Sometimes it is. But the moment special agents appear rather than a revenue agent, the matter is criminal and has been for a while.

IRS-CI has among the highest conviction rates in federal law enforcement, because it does not refer cases it is not confident about.

What IRS-CI investigates

Tax evasion under 26 U.S.C. § 7201, filing false returns under § 7206, failure to file under § 7203, and employment tax offenses under § 7202 — which the government pursues aggressively because withheld payroll taxes are trust funds.

IRS-CI also has broad jurisdiction over money laundering, Bank Secrecy Act and currency reporting offenses, and financial crimes generally — which is why it appears in cases with no obvious tax component at all.

Revenue agent or special agent?

This distinction matters more than any other.

A revenue agent conducts civil examinations. Unpleasant, but civil.

A special agent is a criminal investigator, carries a firearm and a badge, and works in pairs. If two special agents appear, a criminal investigation is underway. They are required to give a modified warning of your right to remain silent and to counsel — and people talk anyway, because the visit is framed politely.

There is no version of that conversation that helps you. Decline, take their cards, and call counsel.

The eggshell audit

An eggshell audit is a civil examination of a return the taxpayer knows contains material problems. A reverse eggshell audit is worse: the civil audit is continuing while a criminal investigation already exists, and the revenue agent is developing evidence usable criminally.

The signals that an audit has changed character: the agent stops asking about numbers and starts asking about intent and who prepared the return; requests focus on specific transactions rather than categories; the agent goes quiet or the case is suddenly reassigned; third parties tell you they were contacted.

Under IRS procedure a revenue agent who develops firm indications of fraud must suspend the examination and make a fraud referral to CI. An agent who instead keeps gathering material after that point has a problem — and it is one worth litigating.

Badges of fraud

Because tax crimes require wilfulness, the government proves intent circumstantially through recognized indicators: understatement across multiple years, two sets of books, false entries or altered documents, concealment of assets or income, dealing in cash to avoid records, destruction of records, failure to cooperate, and implausible or inconsistent explanations.

The defense to wilfulness is genuine and it succeeds: reliance on a preparer or accountant who was given complete information, complexity of the law, genuine mistake, and the absence of a tax deficiency at all. Cheek v. United States establishes that a good-faith misunderstanding of the tax law negates wilfulness — even an unreasonable one.

Bring the accountant in the right way

Your accountant has no privilege in a criminal case. The limited § 7525 practitioner privilege does not apply to criminal matters, and your existing accountant can be subpoenaed to testify about everything you told them.

The solution is a Kovel arrangement — the attorney engages the accountant, so the accountant's work is performed in support of legal advice and falls within attorney-client privilege and work product. Doing this correctly and before the accountant starts analysing anything is essential. Using your longtime preparer, who also prepared the returns under investigation, is the common and costly error.

Voluntary disclosure

The IRS operates a Voluntary Disclosure Practice for taxpayers who come forward before being under investigation. It does not guarantee immunity, but it substantially reduces the likelihood of criminal referral.

Timing is everything: the option disappears once an investigation begins. If special agents have already made contact, disclosure is no longer available and the strategy is different.

What to do if agents contact you

Do not answer questions. Say that you want to speak with a lawyer, and say nothing else. That is lawful, it cannot be used as evidence of guilt, and it is the single most effective thing you can do. Lying to a federal agent is a separate felony under 18 U.S.C. § 1001 — no oath required.

Do not consent to a search. If agents have a warrant they do not need permission. If they are asking, they may not have one.

Do not destroy anything. A preservation duty attaches the moment you know of the investigation, and destroying records is its own felony.

Write down what happened. Names, badge numbers, agency, time, what was asked, what was taken. Do it the same day.

Then call (214) 225-7117. If an agency is already at your door, the investigation is well advanced — and the pre-indictment window is the most valuable period you have.