Red Alert: Why You Need to Fix Your Crypto Taxes Right Now
“This is a major turning point, your crypto taxes cannot be ignored anymore,” says tax attorney and CPA Andrew Gordon.
Contacted by IRS Criminal Investigation, or worried you will be? The first conversation should be with an attorney.
Tax evasion, filing a false return, and willful failure to file are felonies, and most criminal tax cases begin as civil audits. What you say to an examiner, an agent, or your own accountant can become the case against you. Our attorneys step in before that happens, handle every contact with the IRS, and work toward the outcome the facts allow: no referral, a civil resolution, or a defense.
What we bring to a criminal tax matter
- Attorneys and CPAs on the same team, so the numbers and the defense are built together
- Led by a tax attorney and CPA who began his career at the IRS
- Representation in investigations, eggshell audits, and disclosures
- Attorney-client privilege from the first call
Where to start
What a criminal tax attorney does
Three things, in order. First, stop the flow of statements and documents that build the case, by putting counsel between you and the IRS. Second, evaluate the exposure honestly, with a CPA reconstructing the numbers under the attorney’s privilege rather than yours. Third, choose the path: correcting the problem through the Voluntary Disclosure Practice before an investigation opens, managing an audit so it stays civil, or defending an investigation that has already begun.
The early decisions matter more than anything that happens later.
IRS Criminal Investigation special agents build cases through interviews, summonses, and records, and by the time they contact a taxpayer the investigation is usually well along. Do not answer questions, do not produce documents, and do not contact your accountant. Call an attorney, who will make contact with the agent on your behalf.
A civil audit of a return you know has a problem. The examiner may not know yet. You cannot lie, you need not volunteer, and every document produced is weighed for what it reveals. An attorney manages the production and keeps you out of the interview, so the audit has a much better chance of staying civil. Eggshell audits
Evasion requires a deficiency, an affirmative act, and willfulness; fraud charges under other sections have their own elements. The defense usually turns on intent, and intent is inferred from conduct: what was concealed, what was said, what was done after the problem was known. Tax fraud defense
For taxpayers who have not yet been contacted, the Voluntary Disclosure Practice lets you come forward through IRS Criminal Investigation, pay the tax, interest, and a fraud penalty, and generally avoid prosecution. It is available only before the IRS has your name from another source, so timing is everything. The Voluntary Disclosure Program
If a spouse or former spouse is under investigation and you signed joint returns, you may be relieved of the resulting liability if you did not know and had no reason to know. The request must be made in time and is a separate matter from the criminal case. Innocent spouse relief
Preparers are investigated for false returns, refund schemes, and failing to sign. If the IRS has contacted you about returns you prepared, or your clients are being audited in a pattern, speak with an attorney before responding; preparer cases move to injunctions and prosecution quickly.
Criminal tax defense | Skokie, Illinois and nationwide
A criminal tax problem has a path through it.
Most people who call us have a problem in a return and no idea how serious it is. Many of those matters are resolved civilly, some through a disclosure the IRS never investigates, and the ones that become cases are defended by attorneys who have handled them before. The priorities are the same as yours: end the exposure, protect what you have, and let you move on.
The attorneys who handle criminal tax matters
Criminal matters are handled by attorneys with privilege from the first call, working with our CPAs on the numbers.
Andrew Gordon
MANAGING PARTNER
Jennifer Keegan
MANAGING ATTORNEY | TAX CONTROVERSY
Start with these guides
IRS Voluntary Disclosure Program
The IRS Voluntary Disclosure Program (VDP) gives taxpayers a chance to avoid criminal tax charges by submitting their late or corrected tax returns and agreeing to pay the penalties.
Questions people ask before they call
If IRS Criminal Investigation has contacted you, yes, before you say anything. If you are in a civil audit and know the return has a problem, yes, before the next response. If you are worried about a past return and no one has contacted you, an attorney can evaluate the exposure under privilege and tell you whether a disclosure makes sense. An accountant can be compelled to testify about what you told them; an attorney cannot.
No. Agents and examiners deal with represented taxpayers every day, and representation is treated as ordinary. What creates suspicion is inconsistent statements, missing documents, and answers given without thinking, all of which representation prevents.
Evasion, filing false returns, willful failure to file or pay, employment tax fraud, refund fraud, false statements, structuring cash transactions, and obstruction. Crypto and offshore matters are current enforcement priorities, and preparer fraud is investigated separately.
Be polite, decline to answer questions, take the agent’s card, and say your attorney will be in touch. Do not consent to a search, do not produce documents, and do not call your accountant or anyone else involved. Then call us. The interview the agent wanted is the single most damaging thing that can happen in the case.
Federal tax felonies carry up to five years per count and fines, plus the civil tax, penalties, and interest. Most cases resolve before trial, and the outcome depends heavily on what was done before charges: disclosures, cooperation decisions, and the restitution posture. Those decisions belong to an attorney who has been through it.
