With the current aggressive enforcement of the criminal tax laws by the IRS, it is important to be aware of your rights if special agents from the IRS Criminal Investigation Division (CID) show up.
First, it is important to fully realize the obvious: these agents are not investigating a mere civil matter. It is a criminal case, and the agents are trying to put someone in prison.
Since agents are normally asking questions about matters that occurred years ago, it is easy to be honestly mistaken about the matters you are being questioned about. Agents will, however, believe that you are lying if they have information that contradicts what you tell them. As Martha Stewart found out, any statements made to federal agents that the government can prove are false can be the basis for criminal charges in addition to the tax charges. Thus, if you are contacted by CID special agents, it is best to politely decline to answer any questions and contact an experienced IRS tax attorney immediately. You do not have to answer any questions, and it is wise that you don’t until you have retained an attorney to determine the focus of the criminal investigation.
It is also important to remember that any statements you make to your CPA or tax preparer are not confidential in any way. Likewise, any statements made by you to friends, business associates or relatives are not confidential. That person can be subpoenaed by the government to appear before a federal grand jury or a court. If you tell that person anything that the government could view as inculpatory, that person will be a witness against you. The only conversations that are privileged and confidential are the ones you have with your lawyer or someone working for him or her.
Finally, it is important to make certain that you get all of your personal records back from your tax preparer. If the government subpoenas those records from the tax preparer, there is normally no privilege that can be asserted. However, if all of the personal records are in your possession, privileges could likely be asserted.
If you are under investigation for tax fraud or tax evasion, please contact Dan C. Guthrie, Jr in Dallas, TX. He can be reached by phone at 214-953-1000 or by filling out the intake form on the contact page.