IRS Criminal Prosecutions: The Facts

You'll know you have IRS issues if you open your door and the person visiting identifies himself as an agent from the Criminal Investigation Division or CID. Special Enforcement and General Enforcement are 2 arms of the IRS police department. Special Enforcement investigates organized crime, drugs, and unions. General Enforcement gets common taxpayers and everything else.

You don't really have to be the person under investigation to be contacted by the CID. It could be a friend, family, neighbor, colleague, associate, employee, or anyone you might know. Don't lie and be careful with dealing with the CID as 80% of all tax crimes are prosecuted through their thorough investigation and you may unwittingly lead them to you.

If you are the one being investigated, do not answer any inquiries from the CID. Wait until the agents leave then call your lawyer immediately. Do not seek information regarding the investigation from the IRS. Leave it up to your lawyer to call them to see what's going on.

The CID will recommend if you should be prosecuted or not after the investigation. It depends on the merit of the case against you. If things are favorable for you and you have a very good tax attorney, or if they cannot prove your guilt beyond a reasonable doubt, you may be off with just civil penalties.

You would be investigated because you:

• filed a false tax return.
  
• did not file a tax return.
  
• evaded taxes.

The Justice Department takes over if the CID recommends prosecution. It will be decided if the IRS should seek a federal grand jury indictment against you after an Assistant U.S. Attorney General reviews your case. You will be ordered to report before a federal judge or be arrested if you are formally charged. At this time, you will be given the opportunity to plead guilty or not guilty. You could be released on your own recognizance or post bail.

Pleading not guilty eventually leads to a trial by judge or a jury. An average sentence of two years in a federal prison is what you will be getting if you are guilty beyond a reasonable doubt. A plea bargain might give you a reduced sentenced, or even just put on probation or fined. You will, however, need to pay the cost of prosecuting you.