Free Consultation: 858.450.1040 Payment | Client Login

MENUMENU
  • EDD
  • IRS
    • IRS Notices – What They Mean
  • About Us
    • MEET THE TEAM
    • PRACTICE AREAS
    • CONTACT US
  • TAX LAW & EDD RESOURCES
    • SMALL BUSINESS OWNERS TAX LAW GUIDE
    • EDD & IRS AUDITS
    • CRIMINAL TAX
    • SAN DIEGO TAX ATTORNEY
    • Orange County Tax Attorney Services
    • TAX BALANCE
    • INNOCENT SPOUSE RELIEF
    • OTHER TAX LAW MATTERS
    • SALES TAX AUDITS
    • UNFILED TAX RETURNS
    • OFFERS IN COMPROMISE
    • CALIFORNIA INCOME TAXES
    • INTERNATIONAL TAX
    • TAX COLLECTIONS
    • CORPORATE | BUSINESS TAX
    • PAYROLL TAX AUDITS
    • TAX LEIN
    • FAQs
  • SBA Loan Resources
    • PPP FORGIVENESS DENIAL APPEAL
    • SBA Criminal Defense
    • FAQs
  • RESOURCES
    • Blog
    • VIDEO LIBRARY
Home > Blog > What to Know When Your Client is Facing a Criminal Investigation by the IRS

What to Know When Your Client is Facing a Criminal Investigation by the IRS

November 7, 2018

What to Know When Your Client is Facing a Criminal Investigation by the IRS

There are few calls less welcome than a call from the IRS.

It could come directly to your accounting office or you might hear from a client after they have been contacted. Either way, you need to take the issue seriously and act carefully because your immediate actions may negatively affect both you and your client.

Initially, confirm that it’s the IRS and not scammers who are calling. IRS scams are common, so don’t hesitate to vet the credentials of anyone who claims to be official. In almost all cases the agency provides written notification before calling, and if they arrive in person they will show two pieces of identification.

Once you’re certain that you’re dealing with the IRS, your next steps depend on how you have been contacted. Read on to find out what you should do if your client contacts you or if the IRS contacts you directly.

When the Client Contacts You

This is the more likely way you’ll hear about a criminal investigation. When you receive a frantic call from a client, your instinct may tell you to be helpful, apologetic, or reassuring. Think before you speak. It’s important to choose your words very carefully to avoid making the situation worse:

  • Avoid Giving Legal Advice – Unless you are an attorney you cannot give legal advice no matter how informal it may seem. You shouldn’t even inquire about the nature of your client’s legal troubles.
  • Recommend Finding Immediate Representation – The only person who can help your client is a tax attorney. Advise your client to find a lawyer immediately and to make that lawyer the primary point of contact moving forward.
  • Cut Off Further Contact – There is no such thing as accountant-client privilege, so if you give any advice, you may have to disclose it later in court. For everyone’s sake, the best policy is to avoid having any contact with your client after an investigation is launched.
  • Preserve Any Relevant Documents – At some point, you may have to turn documents over to the IRS or to your client’s lawyer. Ensure that any relevant documents are not scheduled to be destroyed or lost in a forgotten file folder.
  • Consult with Third Parties – Contact your malpractice insurance provider to explore your personal liability. You may also want or need to retain personal legal counsel.
  • Look for Another Client – It’s prudent to formally break ties with any client accused of a tax crime. For many accountants and CPAs, the relationship with a client involved in this type of investigation creates legal and reputational risks that are just too high to accept.

When the IRS Contacts You

You may be contacted by the IRS directly regarding your client’s case before your client has a chance to contact you. Given the authoritative status of the IRS, it’s tempting to be compliant, but remember you are not always under obligation. In fact, you could face penalties if you do provide certain details. Your best plan of action in this situation is to:

  • Decline to Offer Assistance – Politely but emphatically decline to offer any assistance until you have representation. Stress that you are willing to cooperate later, but only after there is a lawyer in your corner.  
  • Contact Legal Counsel – Your very next call should be to a lawyer. Counsel can help you assess the situation, safeguard your interests, and assert your rights before the IRS. You may be tempted to call your client, but it’s better to avoid contact unless advised otherwise.
  • Comply with Any Summons – A summons requires you to begin gathering documents before turning them over at a later date. You will want to comply with any summons you receive unless your lawyer advises otherwise.
  • Cooperate with Any Warrant – You must comply with any search warrant, but you are not required to answer questions without a lawyer present. Having legal counsel is incredibly important in this situation because executing a search warrant implies that you are implicated in the investigation.

When the IRS comes calling it’s essential for CPAs to seek outside assistance. Only a tax lawyer can provide your client with the legal aid he or she desperately needs. A tax lawyer is also the only professional who can defend you and your firm.

Don’t feel responsible for a tax crime and don’t take the blame. Instead, contact a tax lawyer immediately. Reach out to Milikowsky Tax Law for expert counsel and experienced advice.

Filed Under: Blog, News Tagged With: Audit, California Taxes, Criminal Investigation, IRS, IRS Audit

Archives

Search

Categories

Questions About
Tax Audit/Controversies?

A representative will be in contact within 1 business day
PRIVACY POLICY

Get Monthly Updates on Important Tax Law Matters



Milikowsky Tax Law is located at: 4250 Executive Square, Ste. 650, La Jolla, CA 92037
o. (858) 450-1040 | m. (858) 212-0542 |
Privacy Policy

DISCLAIMER:
The information on this website is for general information purposes only. Nothing on this site should be taken as legal advice for any individual case or situation. This information is not intended to create, and receipt or viewing does not constitute, an attorney-client relationship.

Milikowsky Tax Law © All Rights Reserved. Clear1099.com | Cal1099.com | California1099.com © All Rights Reserved.

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Cookie settingsACCEPT
Privacy & Cookies Policy

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may have an effect on your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Non-necessary
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.
SAVE & ACCEPT