There is almost never a warning except for a knock on the door…
And upon opening, two people announce themselves as special agents for the Internal Revenue Service, or IRS, and want to talk to you about a tax return. Can they come in? Your first response should be to ask for a business card from them, and the second should be that you will have your attorney contact them and they should have a nice day.
How the IRS Responds
The IRS typically looks at tax issues in three ways: a desk audit, a regular audit, and an investigation. The desk audit is announced by formal letter from the IRS and requires information be provided in writing to answer specific questions. These are typically small dollar issues. If you agree with the IRS’ finding then you pay the recalculated fee per the letter and the matter is closed. The formal audit is more personal; it requires the taxpayer or his representative to appear at an IRS office and answer questions. If a business, the IRS auditor may visit and go through paperwork at the place of the business. In either situation, it’s smart to identify any mistakes yourself first with a 1040X amendment ready to go, or to be cooperative and go through the audit. At the end, the auditor will provide the findings, ask if you agree, and then detail fees and penalties owed. Pay the amount and the matter is closed as well. Dispute the amount, and prepare for civil tax court.
However, the third issue is where many people make big mistakes thinking the IRS activity is no big deal. When a special agent gets involved, it is due to an investigation being triggered. If your name comes up, you are either identified as a witness or a potential prosecution target. In either case, you are talking to a law enforcement officer operating under federal law. Anything you say or provide can be used against you, and if you say something wrong you can be charged with the federal crime of a false statement to a federal officer punishable by up to five years in federal prison, even if you have done nothing else. Agents frequently appear in pairs, allowing both of their reports to be treated as corroborating expert witness evidence when it comes time for prosecution. And, if you have any crazy ideas about taking on the federal government in court, consider this: the U.S. Attorney’s Office has a 97 percent win ratio on cases annually. That means, aside from paying a couple hundred thousands of dollars for a full criminal defense, you have 3 percent chance to be found innocent going to trial. It’s not very good odds.
Don’t Panic, Don’t Engage
The best thing a person can do if IRS agents want to have a talk with you is to not say anything at all. You are well within your rights to refer the matter to your attorney for further contact, and you can close the issue with a response that your attorney will contact the agents per their business cards. You may get a response that you’re being uncooperative. Listen but don’t engage.
A federal investigation is a very serious matter, regardless of a being a tax issue, and your very freedom is on the line until the matter is fully closed. Your criminal defense attorney can make immediate contact, find out the details of the matter and why you’re involved, and then provide the best response. You are totally in the dark otherwise, the worst place to be when there is a high risk of being charged with a federal crime. Don’t make that mistake.
To learn more about federal tax investigations in Florida or protecting your assets contact Destin Florida defense attorney John F. Greene. With 30 years of experience working with defendants in both state and federal courts Attorney Greene will review the facts of your case and, if there is a remedy for your legal issue, he will find it. Attorney Greene’s practice is also a certified debt relief agency in the State of Florida which can help negotiate reasonable terms with tax debt.
The law office of John F. Greene is located in the City of Destin and serves all those along the Emerald Coast, specifically the Destin, Crestview, DeFuniak Springs, Fort Walton Beach, Niceville and Panama City Beach. Contact John online or call 850-424-6833 to schedule a consultation.