Criminal Tax Litigation

Generally, criminal tax litigation can be traced back to the IRS civil audit. Revenue Agents are instructed to suspect fraud in the course of their examination. If an audit unearths a firm indication of fraud, the Revenue Agent will consult with a Fraud Technical Advisor, who will assist the Revenue Agent in developing the case and in determining whether a referral to the Criminal Investigation Division (the “CI Division”) should be made.

The CI Division of the IRS is responsible for all criminal tax investigations, and no case will go forward without first being investigated by the CI Division, even if the criminal investigation is initiated by another federal agency (such as the Federal Bureau of Investigation or the Drug Enforcement Administration). If the CI Division determines that a case should not be forwarded for prosecution, normally you will receive a withdrawal letter. Alternatively, if the CI Division recommends prosecution, you will be notified that the case has been forwarded to the Department of Justice (the “DOJ”).

The DOJ operates under different guidelines than does the CI Division.  The DOJ’s criteria for pursuing a case involve whether the government will prevail in the courtroom in bearing its heavy burden of proof. Even if the DOJ harbors the notion that you may be guilty of a tax crime, flaws in factual development or problems of law may militate against proceeding further. The DOJ has no quota of convictions to be met.

If the DOJ decides to present the case for an indictment, the case is transmitted to the U.S. Attorney for the district in which you reside or in which you conduct your principal business.

Criminal offenses are considered actions such as:

  • Tax evasion.
  • Willful failure to collect or pay over tax.
  • Willful failure to file return, supply information, or pay tax.
  • Submission of false documents and false returns.
  • Attempts to interfere with administration of Internal Revenue laws.
  • Providing false statements.
  • Money laundering.
  • Bribery.
  • Aiding and abetting.
  • And failure to file foreign bank account reporting forms (FBAR).

If you’ve received notification from the CI Division or the DOJ that you are under investigation for a criminal tax offense, you should not attempt to handle the issue on your own.  As a taxpayer whose compliance with the Internal Revenue Code is under dispute, you have the right to legal protection.

Contact a tax attorney at Law Offices of Christy Lee, P.C., immediately, so that our team of tax professionals can protect your best interests with informed, proactive guidance concerning your criminal tax matter.