Sophisticated Representation in Tax Fraud Cases

Criminal tax fraud investigations are among the most terrifying weapons in the government’s white collar enforcement arsenal. Why is this so?

First: Prosecutors and IRS Criminal Investigative Division (CID) Agents enjoy far greater powers in conducting tax fraud investigations than they do in handling other white collar matters.

Second: When federal authorities investigate you for any potential federal crime, from public corruption to arms dealing, they often will obtain and examine your tax returns. If you reported income stemming from an activity the government is investigating, you have arguably admitted some role in that activity. But if you did not report any income from questionable activities, the government may decide to bring tax fraud charges against you.

Third: Criminal tax fraud investigations present ongoing dangers. You have to pay taxes and file tax returns every year. But many of the routine questions you answer as part of filling out your return can have devastating consequences if you are caught up in a criminal tax fraud investigation.

For example, assume that you are under investigation for illegally sheltering money in a foreign bank account as part of an alleged tax fraud scheme. Assume further that the account is not in your name, but that the government believes you control it. Do you report the interest income from the account when filling out this year’s return in order to avoid new charges? If so, have you admitted that you control the account and that prior tax returns, where interest income was not reported, were knowingly false? Or should you invoke the Fifth Amendment as to interest income questions on the tax return? And in what manner are you even allowed to invoke the Fifth Amendment when completing a tax return?

I am attorney Solomon L. Wisenberg, and I have represented clients throughout the country as part of my white collar criminal defense practice, including clients ensnared in tax fraud investigations. My knowledge of the federal criminal laws concerning income tax fraud, income tax evasion, payroll tax fraud, and illegal off-shore accounts, and his understanding of how the government prosecutes these cases, help him protect and defend his clients. I can help lead clients through the minefield of a tax fraud investigation or prosecution.

Being targeted in a tax fraud case is one of the most frightening events anyone can endure. IRS CID Special Agents are unlike any other federal law enforcement officers in their tactics and powers. They have a habit of showing up unannounced and in force at your office or home, catching you off guard at odd hours and asking rapid-fire questions. It is extremely dangerous and unwise to discuss anything of substance with them unless you first consult a criminal defense attorney experienced in federal tax fraud defense. Not just any lawyer will do. Success in tax fraud cases requires sophisticated representation.

Three Important Rules

1. Be careful in hiring an accountant: Persons under investigation for criminal tax fraud should typically not personally retain their usual accountant, or any accountant, to help analyze their situation. This is because there is no such thing as an accountant-client privilege in the context of a federal criminal investigation. Thus, IRS CID Special Agents can get everything they need from such an accountant. Instead, your attorneys can hire what is known as a Kovel accountant, under the shield of the attorney-client privilege, and properly protect your conversations with that professional. I have experience in employing Kovel accountants to aid the defense team in tax fraud investigations.
2. Be careful about audits: If you are being audited by the IRS and believe you may have exposure to criminal prosecution, feel free to contact me. Responses given in civil audits can be used in criminal prosecutions. I can advise you on the procedures for enduring an “eggshell audit.”
3. Be careful about offering to pay: By the time the IRS has decided to seek a criminal indictment, no amount of money will make the problem go away. Offers to resolve the issue by paying the IRS can be deemed an admission of guilt and used against you in court. It is usually, but not always, the wrong thing to do.

Contact a Tax Fraud Defense Attorney

If you are being audited, investigated or charged with tax fraud or tax evasion of any kind, feel free to email me, white collar criminal defense attorney Solomon L. Wisenberg, at the Washington, D.C., offices of Nelson Mullins Riley & Scarborough, LLP.

You may also call me at 202-689-2922 (direct dial) or 202-257-7846 (cell phone).