The IRS might start an investigation against taxpayers for a variety of reasons. Anything from fraud to tax to a simple fault in return can lead to an audit and if not taken seriously, the scenario can evolve into an IRS tax investigation. Sometimes individuals don’t even realize their fault until Uncle Sam sends them a notice about an ongoing criminal investigation. If you or any of your friends or relatives get into such situations, you must consult a tax resolution attorney who can help you get out of the situation. It is also important to seek assistance from an attorney who is experienced in IRS problem resolutions. In this post, we share everything you must know about criminal investigations and IRS tax problems. Read on!
Purpose of an IRS Tax Investigation
Taxpayers who are suspected to have been involved in a tax crime go through IRS tax investigations. The tax collection agency gathers evidence that either absolves the leads or is subject to the approval of criminal prosecution. When an investigation points to wrongdoing, the consequences can be jail time or huge fines. For all these reasons, you must avoid a criminal investigation altogether or make sure that you take immediate steps to manage it by working with a tax law attorney.
Difference Between IRS investigation and Audit
During an audit, Uncle Sam verifies that taxpayers have completed their tax liability. On the other hand, when the IRS proposes an investigation, it builds a case against taxpayers for their tax crimes by gathering evidence that is used for prosecution. A criminal investigation is comparatively more serious and must be handled with proper recommendations and advice from IRS lawyers.
When Can IRS Tax Investigation Happen?
There are several reasons you can face an IRS tax investigation. If the IRS is suspicious that you have committed a tax crime such as tax evasion or fraud, it can start accumulating evidence against you. Some of the signs that anyone is on the radar include your accountant being contacted by CID or your bank records summoned.
If you are facing an investigation in Dallas or any other location, you must take action as quickly as possible and consult with a tax resolution attorney. A tax pro boosts your chances of attaining the desired IRS problem resolution. They also help you prevent making any mistakes that could worsen the situation. Also, make sure that you inform your accountant about the IRS tax investigation and cease communication with them thereafter because, unlike an attorney-client, such conversations are not protected.