Accused of tax fraud, or afraid a return could be read that way? Intent is the whole case.

The IRS uses the word fraud for a 75 percent civil penalty and for a criminal referral, and the same facts decide both. Fraud has to be established from conduct: concealed income, false records, implausible explanations, dealings in cash. Most large tax mistakes are negligence, not fraud, and keeping them on that side of the line is the work of the case.

Since 2012 the firm has handled fraud matters from the first notice through Appeals and the Tax Court.

What we bring to a fraud 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 audits, fraud penalty cases, and investigations
  • Attorney-client privilege from the first call
Portrait of attorney Andrew Gordon
We represented a client who had already plead guilty to tax fraud and was awaiting sentencing. The judge wanted to throw the book at our client and sentence him to 5 years in prison. We reduced the sentence to 6 months.
Significant Reduction of Sentencing
A Chicago business owner was subjected to an eggshell audit (an audit with a high potential for criminal investigation) regarding business expense deductions. After he hired Gordon Law, the audit closed in 1 month with no criminal prosecution and no other tax years examined.
Eggshell Audit
One client had not reported crypto activity from decentralized exchanges. By carefully navigating the audit and controlling the scope through legal means, we helped them avoid paying $44,410 in additional taxes and avoid a criminal investigation.
Unreported Decentralized Exchanges
A restaurant owner was subjected to a criminal investigation regarding sales tax by the Illinois Department of Revenue. The state alleged our client used a "zapper" to hide taxable sales. We negotiated with the state to amend the client's tax returns and avoid a criminal investigation.
Restaurant Sales Tax
The IRS opened a criminal investigation against a physician for alleged fraudulent filing of income tax returns. We found that the unreported income was unintentional; the client’s business processes were insufficient to determine underreported income. The investigation closed without a referral for prosecution.
Accidental Underreporting of Income
Where to start

Questions people ask before they call

Talk to an attorney
Tax attorneys reviewing documents and discussing strategy during a client consultation

No. The IRS deals with represented taxpayers every day and treats representation as ordinary. Suspicion comes from inconsistent statements and missing records, which representation prevents.

Decline to answer questions, take the agent’s card, and say your attorney will be in touch. Do not produce documents or consent to a search, and do not call your accountant. The interview is the most damaging thing that can happen in the case, and it is entirely avoidable.

Do not respond yet. Talk to an attorney under privilege about what the problem is and how large. The audit can often be managed so it stays civil, and in some cases a disclosure before the examiner finds the issue changes the outcome entirely. Eggshell audits

Sometimes. A civil examiner who stops communicating may have referred the case to Criminal Investigation, which suspends the civil audit. It can also mean a reassignment or a backlog. Either way, it is a reason to have an attorney involved before the next contact.

Negligence is carelessness or disregard of the rules, penalized at 20 percent. Fraud is an intentional effort to underpay, penalized at 75 percent with no statute of limitations and possible prosecution. The IRS infers intent from badges of fraud, and a single large mistake without concealment is usually negligence. Fraud versus negligence

Civilly, a 75 percent penalty on the underpayment, interest, and an open statute for that year. Criminally, a referral that can lead to charges carrying up to five years per count. Most matters that are handled early stay civil, and many civil fraud penalties are reduced or removed at Appeals when the evidence of intent is thin.

Tax fraud defense | Skokie, Illinois and nationwide

Fraud is an accusation about intent, and intent can be defended.

The IRS must prove fraud by clear and convincing evidence, a higher standard than it needs for anything else in an audit. How the audit is handled from the first response, what is produced, and what is said, either adds badges of fraud or removes them. We take over that communication and build the record that supports negligence, mistake, or reasonable cause instead.

Schedule a Confidential Consultation

The attorneys who handle fraud matters

Fraud matters are handled by attorneys with privilege from the first call, working with our CPAs on the numbers.
Meet our team

Andrew Gordon

MANAGING PARTNER

Jennifer Keegan

MANAGING ATTORNEY | TAX CONTROVERSY

Not contacted yet? The Voluntary Disclosure Practice may be the answer.

For taxpayers who know a return is wrong and have not been contacted, the Voluntary Disclosure Practice offers a way to correct it through IRS Criminal Investigation with a generally reduced risk of prosecution, in exchange for the tax, interest, and a fraud penalty on the highest year. It is available only before the IRS has your name from another source.

It may fit if the income came from legal sources, the failure may have been willful, and no examination or investigation has begun. If the failure was not willful, a less expensive route usually applies. That judgment is the consultation. The Voluntary Disclosure Program

Signed joint returns with a spouse under investigation?

If you filed joint returns with a spouse or former spouse whose conduct is under investigation, you may be relieved of the resulting tax, penalties, and interest if you did not know and had no reason to know. The request has deadlines and the IRS must contact the other spouse, so it should be made with counsel and early. Innocent spouse relief

Get Started