The Internal Revenue Service takes criminal tax evasion seriously. While the IRS does not prosecute tax crimes, the agency performs initial investigations that may receive a referral to a U.S. attorney’s office. Texas residents concerned about these suspicions might wonder how the agency’s investigation process works.
Criminal investigations in the IRS’ offices
Typically, something might raise suspicions about possible tax fraud or evasion. Perhaps an auditor questions tax deductions on a return and believes they are fraudulent. The auditor might write a criminal referral that goes to the investigation division.
Also, the IRS has a whistleblower hotline, and people can call the number to leave anonymous tips. The report heads to the criminal investigation division for further review and follow-ups.
A review involves a preliminary analysis by an investigator. Be mindful that an auditor or private citizen may believe fraud occurred, but an experienced investigator might conclude no criminal activity exists.
If an official investigation takes place, a special agent will take charge. Depending on the particulars, the agent could determine that the case is weak or that the evidence is overwhelming. With strong cases, the agent might recommend a referral for prosecution.
Tax crimes and federal charges
Once a U.S. district attorney takes up the case, the accused might face charges in federal court. Criminal tax investigations may lead to an indictment in front of a grand jury, raising fears of possible prison time.
As with all criminal proceedings, the accused is innocent until proven guilty. The defendant might provide compelling evidence that shows the federal government’s case is either weak or faulty. An acquittal could be possible.
Plea bargains and other deals might be a preferred option for some. Even the prosecutor could prefer to close the case this way.