What to Do if You Are Under Investigation for Tax Fraud

The Internal Revenue Service (and the tax agency for the state you live in) has extensive investigatory powers. Although an investigation  does not automatically mean that you will be charged and convicted of tax fraud, it can certainly lead to those adverse consequences. That means that you should take the process seriously and get help. The following tips and suggestions are a good starting point if you get a notification that you are under investigation.  

  1.     Don’t panic.

Being investigated for tax fraud can be frightening. The IRS can be extremely intimidating. It is easy to lose your cool in these situations, but it is important to keep a cool head. If you panic, you may end up saying or doing things that are not really in your best interests. Panicking can also make you seem guilty when that is not the case. Your best bet is to say nothing and do nothing (including produce documents) without consulting an attorney.  

  1.     Keep in mind the criminal nature of the offense.

Tax fraud is illegal. It will not matter if you can pay the taxes that you avoided now, after the investigation begins. The IRS and other law enforcement agencies may still be interested in criminal charges, even if you offer to pay the back tax obligations.

 

You should also bear in mind that an offer to pay all or some of the taxes owed could signal guilt, even if you are just trying to make the situation go away. Before you do or say anything, consult with an attorney.

  1.     Keep conversations about the investigation to a minimum.

Keep in mind that part of the IRS’s investigation may to talk to your family and friends about your spending habits, and any other information they want to volunteer. If you start sharing information about the investigation or your financial situation with friends and family, they may end up having to share that information with the IRS. An investigation is stressful and you will want to discuss it with other people. Once under investigation, however, decline to share information about your finances, your tax liability or the investigation with others.

  1.     Call a white-collar criminal defense attorney.

State and federal tax fraud cases are complicated. The average criminal defense attorney may not have the experience and know-how that you need to defend yourself in this type of situation. Instead, you should use a white collar criminal defense attorney that has experience with this particular charge.

Bergstein Flynn & Knowlton has the experience you need to minimize the effects of tax fraud charges. You should have a lawyer to advise and protect you as soon as you realize that you may be under investigation. Learn more about our criminal defense services by visiting our website or calling (646) 760-3579.

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