When an IRS agent knocks on the door or a taxpayer receives a notice of a tax investigation, the shock and fear can be enormous. After all, the targeted taxpayer faces real consequences that could include six or seven-figure debts, liens, property seizure, and, most frightening of all, incarceration. Texas criminal tax Lawyer Lawrence Brown formerly worked as a DOJ Tax Division trial attorney before founding the firm. He, therefore, understands the strategies and tactics that U.S. prosecutors employ and knows how to successfully challenge them.
Investigation witnesses and targets cannot afford to wait to hire counsel, and with so much at stake, they should seek the best representation they can find. Brown, PC has 25 years of experience representing high-profile clients in some of the biggest criminal tax cases to be prosecuted by the government.
Protecting High-Profile Individuals Charged With a Tax Crime
Our clients include some of the best-known names in business, entertainment and sports, as well as high-profile professionals in the financial, legal, medical and business sectors. We recognize the potentially life-changing consequences of criminal prosecution. Beyond the devastating financial repercussions and the loss of freedom, individuals face extensive damage to their reputations and careers.
The government may claim to just have a few questions or just want to view a document. Even if that is the case, this is the time to hire an experienced Texas criminal tax lawyer. Cooperation should not equate to giving up rights.
Our goal is to stop the government from filing charges, which we can often do if we are retained during the early investigative stage. In addition, through our early involvement, we can prevent prosecutors from finding incriminating evidence and be in a strong position to negotiate a favorable settlement.
Corporate Tax Crimes
Having represented some of the biggest names in the corporate world, we have a proven history of reaching equitable settlements quickly. We handle tax fraud claims that involve such complex issues as tax evasion, money laundering, corrupt practices, investor fraud, accounting fraud, and illegal foreign accounts. Our team has been successful in saving corporations millions of dollars in tax fraud penalties, back taxes, interests and fines.
Companies targeted in corporate tax fraud investigations can face hundreds of thousands of dollars, if not millions of dollars, in fines. In some cases, corporate tax fraud investigations can lead to charges against the company’s owners, executives and personnel as well. As a result, hiring an experienced Texas criminal tax lawyer at the first sign of a potential investigation is critical. At Brown PC, we represent both companies and individuals, and if your company is facing scrutiny, we can help you protect your company, yourself, and your employees.
Possible Causes of a Criminal Tax Investigation
When facing a criminal tax investigation, it is important to understand why. Identifying the cause of the investigation can help you understand the investigation’s scope, assess your risk and formulate a defense strategy that is tailored to the specific circumstances at hand. Some examples of potential triggers for criminal tax investigations involving IRS Criminal Investigation (IRS CI) and the Texas Comptroller include:
- A recent federal tax audit that uncovered evidence of criminal tax fraud
- A tip from a company insider or external whistleblower
- A referral from another federal law enforcement agency
- Automated review of corporate tax filings for possible “red flags”
- Information publicly disclosed in corporate filings, in the news media or on social media
Why is it important to know the cause of a criminal tax investigation? Let’s say, for example, that IRS CI received a tip from another federal agency. In this scenario, not only could you (or your company) be at risk for facing criminal tax charges, but prosecutors may be working to substantiate other non-tax-related charges as well.
To determine the cause of your (or your company’s) criminal tax evasion, your Texas criminal tax lawyer at Brown PC will work to gather the relevant information through various means. This includes means such as interfacing with the investigating agency and conducting an attorney-client privileged internal review, among others. Once we know why you (or your company) is facing scrutiny, then we can begin building and executing a targeted and cohesive defense strategy.
Types of Criminal Tax Cases
We defend individual and corporate taxpayers during investigations targeting all types of federal tax crimes in Texas. This includes common allegations such as:
- Abusive tax schemes
- Failure to file returns
- Filing false returns
- Underpaying tax liability
- Claiming fraudulent refunds
- Making false statements to federal agents
- Assisting with the preparation of false returns or participating in a tax fraud conspiracy
Recent Enforcement Priorities in IRS Criminal Investigations
While IRS CI investigates all forms of tax fraud, tax evasion and related white-collar federal crimes, it has a shortlist of specific enforcement priorities. If you are facing an investigation involving any of the following types of allegations, it is important that you speak with an experienced Texas IRS criminal investigation lawyer promptly:
Abusive Trust Schemes and Tax Shelters
The IRS routinely targets abusive trust schemes and other tax shelters in criminal tax fraud investigations. While the use of trusts and other structures to mitigate tax liability is not inherently unlawful (and is a part of many legitimate tax planning strategies), the IRS views these as red flags for fraud.
Cryptocurrency-Related Tax Fraud
The IRS has been cracking down on cryptocurrency-related tax fraud in recent years. It has used subpoenas to obtain investors’ identities from exchanges and other intermediaries, and it has sent several rounds of warning letters to investors advising them to reassess their federal income tax compliance.
Employee Retention Credit (ERC) Fraud
The Employee Retention Credit (ERC) proved to be a prime target for fraud both during and after the COVID-19 pandemic. Today, IRS CI is actively targeting ERC claimants in criminal fraud investigations—and it is working with the U.S. Department of Justice (DOJ) to pursue substantial penalties in many cases.
Paycheck Protection Program (PPP) Fraud
The Paycheck Protection Program (PPP) also proved to be a prime target for fraud. IRS CI is targeting both successful and unsuccessful PPP loan applicants, as well as accounting firms and other entities that assisted businesses with fraudulently obtaining PPP loans and certifying for loan forgiveness.
Offshore Tax Fraud
Offshore tax fraud is a perennial enforcement priority for IRS CI. In addition to targeting taxpayers for tax evasion and tax fraud, IRS CI also works with the DOJ to pursue charges for violations of the Bank Secrecy Act (BSA) and Foreign Account Tax Compliance Act (BSA) disclosure requirements.
What To Expect During the IRS’s Investigation
When conducting criminal investigations, IRS CI has several powerful tools at its disposal. It routinely collects information from targeted taxpayers and third parties through means including (but not limited to):
- Examination of financial records
- Interviews with employees, former employees and others
- Search warrants
- Subpoenas
- Wiretapping and electronic surveillance
Keep in mind, once you learn that IRS CI is targeting you or your business, Special Agents have likely collected a substantial amount of evidence already. While many aspects of the IRS criminal investigation process are formal in nature, Special Agents at IRS CI will attempt to use various informal means to gather evidence as well. As a result, when you or your business is a target, it is imperative that you advise all internal personnel appropriately and rely on an experienced Texas IRS criminal investigation lawyer to help you avoid inadvertent disclosures.
Why Are You (or Your Business) Under Investigation?
When facing scrutiny from IRS CI, it is important to discern why. Federal criminal tax investigations can have various triggers, and different triggers can present different risks and require different defense strategies. For example, if IRS CI is acting on a tip from another federal law enforcement agency, this could substantially broaden the scope of your defense efforts. Common triggers for IRS criminal investigations include:
- Civil Tax Audits – If an audit uncovers apparent evidence of intentional tax evasion or tax fraud, this can result in a referral to IRS CI. Revenue agents routinely refer cases to IRS CI for criminal investigation and potential prosecution.
- Information Collected from Third Parties – From former business associates to cryptocurrency exchanges, IRS CI can (and does) obtain information from various third parties. In many cases, information obtained during an investigation into one party will trigger an investigation into another.
- Referrals from Other Agencies – Referrals from the Federal Bureau of Investigation (FBI), Office of Foreign Assets Control (OFAC), and other federal law enforcement agencies can also trigger IRS criminal investigations. Referrals from state and international taxing authorities and investigative agencies can trigger IRS CI investigations as well.
- Joint Task Forces and Other Coordinated Law Enforcement Efforts – IRS CI routinely participates in joint task forces and other coordinated law enforcement efforts—both in the U.S. and internationally. In these cases, targeted individuals and businesses will often be at risk for facing wide-ranging criminal allegations.
- Whistleblower Complaints – The IRS Whistleblower Office accepts complaints from employees, former employees and other private citizens. If a whistleblower’s allegations appear even facially legitimate, this can be enough to trigger an invasive, costly and potentially high-risk IRS CI investigation.
Penalties for Federal Tax Crimes in Texas
In criminal cases, the penalties for tax fraud, tax evasion and other tax law violations can be severe. This is true at both the state and federal levels.
For example, under Texas law, many tax crimes can be prosecuted as third-degree felonies. These crimes carry up to a $10,000 fine and 10 years of imprisonment. But, state tax crimes can also be prosecuted as second-degree or even first-degree felonies in some cases.
At the federal level, the fines for tax crimes can be far more substantial. For example, one of the most common federal tax charges, attempting to evade or defeat tax in violation of 26 U.S.C. Section 7201, carries up to a five-year prison term plus a $100,000 fine for individuals and a $500,000 fine for corporations.
Strategic Communications
Our firm also offers unique strategic communication services to deliver expert PR advice in collaboration with our litigation team to minimize impact of the tax investigation on reputation and brand. This one-of-a-kind service also avoids a common problem that outside PR professionals do not understand the law and may make damaging incriminating statements. Our strategic communication approach recognizes that public relations and legal defense should go hand in hand.
Speak With a Dedicated Texas Criminal Tax Lawyer
With freedom and financial health at stake, you need a Texas criminal tax lawyer who has the experience, determination, and innovation to help you through investigation and trial. Brown, PC is comprised of Texas criminal tax lawyers who deliver excellent, aggressive defenses. Contact our office today to discuss your legal rights and options.