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Tax Evasion, Tax Fraud, And Other Tax Crimes

When the CID completes an investigation and recommends that a taxpayer be prosecuted for a tax crime, IRS lawyers will conduct at least two stages of before there is final approval to proceed with a prosecution:

  1. After the IRS decides to prosecute, it forwards the case to the United States Department of Justice Tax Division in Washington, D. C. Federal prosecutors with special training in prosecuting criminal tax violations review the case and determine whether or not to authorize prosecution.
  2. If the Department of Justice Tax Division in Washington approves prosecution, the case is sent to U. S. attorney’s office located near the suspect. It is instructed to prepare indictments and to prosecute the individual or individuals for the alleged offenses.

The Tax Division’s principal function is to provide legal advice for its main client, the IRS. The Division handles almost all civil litigation arising under the internal revenue laws except for those cases that are docketed in the U. S. Tax Court. The Division also enforces the criminal tax laws by supervising or directly handling all criminal tax cases.

In tax crime cases, the prosecution approval process can work to a suspected taxpayer’s advantage. The process allows several opportunities to derail a federal criminal case before it ever gets presented to a grand jury. Assuming a taxpayer is aware that a case is being prepared against him, his lawyer will have the opportunity to confer with the government’s lawyers and try to convince them not to prosecute his client. If the government has a strong case against the suspected taxpayer, it is unlikely that the IRS can be dissuaded from pursuing the case. However, if the case involves mere misunderstandings that can be explained and the IRS can be convinced that there really was no criminal conduct, the taxpayer may be able to convince the government to decline prosecution prior to grand jury.

In a tax crime case, a defendant is well advised to hire a lawyer who is experienced in federal criminal matters and who also has significant experience in federal criminal tax cases. If a defendant in a tax crime case cannot find a lawyer with this combination of training and experience, the defendant may want to consider hiring a former CID agent to help with the defense. In short, it is sound policy to have both federal criminal defense and tax crime experience on the defense team.

Inside Tax Evasion, Tax Fraud, And Other Tax Crimes