How is an IRS Criminal Tax Audit Different from a "Normal" Examination?

If you are facing an IRS criminal tax audit in New Jersey, it is critical to understand how this differs from facing a “normal” examination. From the IRS personnel and processes involved to the potential outcomes, there are numerous critical differences, and understanding these differences is essential for making informed decisions about your defense. Learn more from New Jersey criminal tax lawyer Kevin E. Thorn, Managing Partner of Thorn Law Group.

What to Expect During an IRS Criminal Tax Audit

When facing an IRS criminal tax audit, making informed decisions is the key to avoiding unnecessary consequences. Making informed decisions starts with knowing what to expect during the process. Unlike a “normal” examination, a criminal tax audit involves:

1. Invasive Scrutiny from IRS Criminal Investigation (IRS CI)

Criminal tax audits are conducted by special agents at IRS Criminal Investigation (IRS CI). These are not the same agents who conduct civil examinations. They receive different training, and they have different directives and priorities. During criminal tax audits, IRS CI special agents scrutinize targeted taxpayers’ returns and look for evidence of potential criminal tax violations.

2. Search Warrants and Subpoenas

In many cases, IRS CI uses search warrants and subpoenas to obtain the evidence needed to substantiate criminal charges. Receiving a subpoena or having IRS CI special agents show up at your home or office with a search warrant is a high-risk situation that requires an informed, immediate response.

3. Examination of Up to Six Years’ Worth of Tax Filings

Criminal tax audits can go back six years in most cases. If IRS CI special agents find evidence of any criminal tax violations within the past six years, federal prosecutors can use this evidence to seek an indictment in federal court.

4. Reliance on Evidence from Other Sources

In addition to examining taxpayers’ records, IRS CI can seek evidence from other sources. This includes seeking evidence from taxpayers’ financial institutions, cryptocurrency exchanges, alleged co-conspirators, and other third parties.

5. The Potential for Serious Federal Criminal Charges

While “normal” examinations can result in liability for back taxes, interest, and penalties, IRS criminal tax audits can result in serious federal criminal charges. This includes (but is by no means limited to) charges such as:

• Tax evasion and tax fraud
• Making false statements to the government
• Bank Secrecy Act violations
• Foreign Account Tax Compliance Act violations
• Money laundering, wire fraud, and other federal crimes

All of these charges carry substantial fines and federal prison time. To avoid these consequences, targeted taxpayers must build and execute comprehensive defense strategies based on the specific circumstances at hand.

Request a Consultation with New Jersey Criminal Tax Lawyer Kevin E. Thorn

If you need to know more about defending against an IRS criminal tax audit in New Jersey, we strongly encourage you to contact us right away. Call 201-842-7696 or contact us online to request a confidential consultation with New Jersey criminal tax lawyer Kevin E. Thorn, Managing Partner of Thorn Law Group.