Just the thought of being contacted by the IRS can be enough to make you sweat. Receiving a letter, phone call, or surprise visit from IRS Special Agents can be extremely stressful and frightening. Whether they’ve reached out to you or your accountant, you may be wondering what to do next to protect both yourself and your business.
IRS Special Agents work for the Criminal Investigation Division and have the authority to investigate criminal tax violations. These investigations are very serious; any adverse findings can result in penalties ranging from hefty fines to prison time. By the time IRS Special Agents reach out to you, they have likely been accruing information on your case for a while and now believe there is enough evidence to pursue it.
Though an agent auditing your business may seem like an intrusion you are powerless to prevent, you do have rights that you should be aware of when the IRS contacts you.
Make Sure It’s Actually the IRS
The first thing to do when faced with contact from the IRS is to verify you’re speaking with actual government officials. Over the years, scams involving people impersonating IRS officials have tricked thousands of individuals into handing over their details. The problem is so pervasive that the IRS now has its own guide on how to determine whether you’re really speaking to a certified agent.
The IRS will not:
- Threaten you with prosecution from local police officers or suggest they’ll bring in immigration officers if you do not pay a fee immediately.
- Request immediate payment using any form of specific payment. The government will always request fees owed with an outlined payment schedule.
- Demand payment without an opportunity to appeal the request or speak to a tax attorney about your options.
IRS agents that approach either you or your accountant in person will have an HSPD-12 card outlining their official connection with the federal government.
Share as Little as Possible with the Agent
Even if you know the person contacting you is a genuine IRS Special Agent, it’s wise to share as little as possible with this person until you’ve contacted a specialist attorney. Anything you say, either to the government official or your accountant, may be used against you in court — even if you don’t believe you’ve said or done anything criminal.
Many people want to clear their names when they believe they’re not guilty of a crime. Remember, tax law is complicated, and it’s possible that you have committed a crime you were not aware of. The statements you make when contacted by a special agent could mistakenly constitute an admission of guilt. Beyond confirming your identity, it’s best not to say anything else to the agents.
Additionally, you will not have to hand over any business documents or records until you have spoken to your legal representation. If an IRS agent contacts you, you can outline your desire to seek professional representation and decline to continue the interview.
Your accountant will know not to provide any information about your accounts to an IRS agent until they have contacted you and informed you of your right to speak to an attorney. In some cases, an accountant may contact a tax attorney on your behalf. Either way, it’s crucial to wait for professional representation before speaking to the IRS, as your attorney’s in-depth knowledge of tax law can make it easier to rectify the situation.
Bring in an Experienced Tax Attorney
The most important thing to do in the event of an IRS investigation is to contact a specialist tax lawyer. Tax attorneys have extensive background knowledge of the workings of the IRS and the intricacies of tax matters. These legal specialists have years of experience defending people against IRS claims.
Tax attorneys know how to navigate the complexities of a criminal investigation as carefully as possible and will aim to protect you from prosecution and unnecessary penalties. With your assistance, your tax lawyer will evaluate the situation and develop a careful strategy to move forward.
In a situation as serious as an IRS criminal investigation, it’s essential that you leave nothing to chance. Get the representation you need to protect yourself from severe repercussions. The team at Milikowsky Tax Law has a wealth of experience helping clients manage investigations by the IRS, and more than a decade of business, legal, and tax expertise — and your first meeting is free. Contact us today.