When does the IRS Criminal Investigation Division step in?

| Jun 4, 2020 | criminal/civil tax litigation

Checking the mail every day is not usually a stressful experience for many New York residents. They expect to receive the usual junk mail, monthly bills and other items, but when an envelope addressed from the IRS arrives, they may experience a bit of anxiety. In most cases, this initial contact simply points out what the agency believes is an error, and taking care of the issue may not be too cumbersome. However, sometimes, the agency’s Criminal Investigation Division becomes involved, and this is where many people may begin to panic.

The IRS CID gets involved when those initiating collection actions or audits believe a taxpayer attempted to defraud the government. Once involved, CID agents will thoroughly analyze all of the relevant information and make a determination regarding whether an official investigation, called a “subject criminal investigation,” is warranted. At this point, agents will talk to people, gather additional information, obtain search warrants and conduct surveillance.

Once this investigation is complete, it then goes to a supervisor who does an analysis and makes a recommendation to either prosecute or not. If the case goes to the United States Attorney or the Tax Division of the Department of Justice, charges could result. The criminal penalties associated with formal charges could be substantial.

At what point should a New York resident exercise his or her right to counsel? Ideally, an individual would greatly benefit from legal assistance from that first communication from the IRS, but certainly once the Criminal Investigation Division becomes involved. It is distressing enough when substantial amounts of money are involved, but when a person’s freedom is also at stake, quick action would be advisable.

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