What happens when the IRS investigates you?

An IRS criminal investigation is not the same as an IRS audit. However, during an investigation, the IRS is putting together a criminal case which means you will be prosecuted by the U.S. Attorney’s Office. If convicted, you could be subject to severe consequences, including fines and possible jail time.

Does the IRS investigate complaints?

The Internal Revenue Service Criminal Investigation Division conducts criminal investigations regarding alleged violations of the Internal Revenue Code, the Bank Secrecy Act and various money laundering statutes. The findings of these investigations are referred to the Department of Justice for recommended prosecution.

How often does the IRS file criminal charges?

Statistically speaking, the chances of any given taxpayer being charged with criminal tax fraud or evasion by the IRS are minimal. The IRS initiates criminal investigations against fewer than 2 percent of all American taxpayers. Of that number, only about 20 percent face criminal tax charges or fines.

Can the IRS file criminal charges?

In short, the IRS won’t pursue you because you can’t pay your taxes. But you may face criminal charges for concealing your income and assets that you can use to pay your overdue taxes.

How long does a IRS criminal investigation take?

twelve to twenty-four months
Often a tax fraud investigation takes twelve to twenty-four months to complete, with 1,000 to 2,000 staff hours being devoted to the case.

Does the IRS bring criminal charges?

The IRS initiates criminal investigations against fewer than 2 percent of all American taxpayers. Of that number, only about 20 percent face criminal tax charges or fines. IRS agents are trained to recognize signs of criminal tax fraud and evasion.

How long does IRS have to file criminal charges?

6 years
Statute of Limitations for Criminal Charges Depending on the exact nature of the alleged wrongdoing, criminal charges are generally filed within 6 years of the violation. The IRS also has a time limit on collections. In general, the IRS will not take collection action after 10 years from the date of the assessment.

What is considered tax evasion?

Tax evasion is using illegal means to avoid paying taxes. Typically, tax evasion schemes involve an individual or corporation misrepresenting their income to the Internal Revenue Service. In the United States, tax evasion constitutes a crime that may give rise to substantial monetary penalties, imprisonment, or both.

What happens if the IRS pursues a criminal investigation?

An IRS criminal investigation is an entirely different ball of wax. The IRS pursues about 3,000 prosecutions each year for tax fraud and tax evasion. If the IRS launches a criminal investigation against you, you not only face a potentially substantial tax bill, but also possible jail time.

What happens when a Tax Agent pursues a criminal case?

If the decision is in favor of pursing criminal charges, the tax agent’s supervisor has the opportunity to sign off on the investigation or stop it in its tracks. If the supervisor gives the go-ahead, then the case is brought to the special agent in charge – the head of the office.

How many Americans face criminal tax charges for not paying taxes?

Of that number, only about 20 percent face criminal tax charges or fines. Unofficially, the minimum amount of unpaid taxes required to trigger an IRS criminal investigation is $70,000.

What triggers the IRS to investigate tax fraud?

While honest mistakes or even negligence generally won’t trigger a tax investigation, perpetrating fraud very well might. IRS agents are trained to recognize signs of criminal tax fraud and evasion. Exhibiting behaviors the IRS calls “affirmative acts” could eventually result in that fateful knock on the door from the IRS.