What Should you do if you become the Target of an IRS Criminal Tax Investigation?
The first knowledge that you have that you are the target of an IRS Criminal Tax Investigation is that you are visited by Special Agents from the Criminal Investigation Division of the Internal Revenue Service (CID Agents). The agents will typically read you your Miranda rights and inform you that you are the target of an investigation.
At this point you should refuse to speak with the agents and seek the assistance of legal counsel immediately. Many taxpayers do the most damage to their case by talking with the agents when they receive this first visit. Taxpayers tend to want to speak with the agents in an effort to convince them they have done nothing wrong. However, CID agents are professionals that know how to get the information they are after. They expect many taxpayers to not talk and obtain an attorney. This does not indicate guilt. You are just protecting your rights.
You must remember that this is a criminal investigation and the the Special Agents are working to build a case to put you behind bars. They prosecute about 75 percent of the cases they investigate and have an extremely high conviction rate. Therefore, they are never to be taken lightly.
Once you have an attorney retained they will interact with the Agents and attempt to convince them to not formally charge you. This is done through a series of conferences and informal meetings. You will need to be candid and truthful with your attorney so that can build the best defense possible for you while they are trying to convince CID not to charge you. Then, if you are charged your defense strategy will already be developed.