Experienced Defense Counsel for Attorneys, CPAs and Enrolled Agents in Federal Investigations and IRS OPR Cases in Texas
The Internal Revenue Service (IRS) and U.S. Department of Justice (DOJ) have been prioritizing enforcement of tax professionals’ legal duties in recent years. When these authorities uncover fraudulent tax shelters and other tax evasion schemes, they will often target not only the taxpayers involved, but also their attorneys, certified public accountants (CPAs) and IRS Enrolled Agents. These investigations can present substantial risks, including the risk of criminal prosecution, so a proactive and strategic defense is paramount.
The IRS Office of Professional Responsibility (IRS OPR) scrutinizes attorneys, CPAs and Enrolled Agents’ conduct in many cases as well. IRS OPR is responsible for overseeing tax professionals who handle federal tax matters on behalf of clients, and it has the authority to bar tax professionals from practicing before the IRS. Suspension or disbarment from practicing before the IRS can have dire consequences. Not only does it prohibit professionals from providing federal tax advice and representation, but it also effectively prevents them from affiliating with other professionals and firms practicing before the IRS—as professionals and firms may not “accept assistance” from someone who has been suspended or disbarred.
Matters We Handle for Licensed Tax Professionals in Texas
We handle all types of federal investigations and IRS OPR cases on behalf of attorneys, CPAs and IRS Enrolled Agents in Texas. This includes handling federal investigations and IRS OPR cases involving allegations of:
- Aiding and abetting general tax evasion and tax fraud
- Aiding and abetting nondisclosure of reportable transactions and assets (including offshore accounts)
- Filing frivolous returns (including taking an “unrealistic position” on a client’s return)
- Fraudulent Paycheck Protection Program (PPP) and Employee Retention Credit (ERC) claims
- Promoting abusive tax shelters
While the penalties for some violations are relatively small (i.e., taking an “unrealistic position” on a client’s return can carry a fine ranging from $250 to $1,000), it is important that licensed tax professionals not simply pay the fine in order to move on. Accepting responsibility for certain violations can trigger an automatic referral to the IRS OPR—and this can have far greater consequences. Additionally, allegations of aiding and abetting, conspiracy to commit tax fraud, and other similar types of federal crimes can carry six-figure fines and federal imprisonment. As a result, an informed and strategic defense is essential in all cases.
Our Process for Defending Licensed Professionals in Federal Investigations and IRS OPR Cases
Our team of highly-experienced professional license defense attorneys represents other attorneys, CPAs and IRS Enrolled Agents in federal investigations and IRS OPR cases in Texas. If you are under investigation or facing scrutiny from IRS OPR, we can help you make informed decisions and execute an effective defense strategy. Our process for representing our professional clients in these matters involves:
Comprehensive Factual Investigation
In all cases, our representation starts with a comprehensive factual investigation. To defend you effectively, we need to know all of the relevant facts—both favorable and unfavorable. Once we know what we’re up against, then we can begin the process of determining what options you have available.
Legal Analysis of All Claims or Complaints
After gathering the facts, we will analyze all claims and complaints against you—both actual and potential. Different types of allegations (and potential allegations) present different risks and require different defense strategies. Federal investigations and IRS OPR complaints against attorneys and CPAs are unique in many respects, so an informed, strategic and nuanced approach is critical.
Defense Strategy Formulation
Once we have fully assessed your risks, then we can formulate your defense strategy. When facing an IRS or DOJ investigation or scrutiny from the IRS OPR, a comprehensive defense strategy is key. We take a structured approach to developing our clients’ defense strategies to ensure that we address all potential risks and maximize our clients’ chances of securing a favorable and unpublicized resolution.
Defense Strategy Execution
With a comprehensive defense strategy in place, it’s time to execute. We will execute your defense strategy as efficiently and proactively as possible. If we can secure a favorable resolution before your case goes to a hearing, we will. If we need to argue your case in court or before the IRS OPR, we will be fully prepared to lay out your defenses in a way that leaves no room for interpretation.
Our Other Defense Services for Licensed Professionals
Along with handling federal tax-related investigations and IRS OPR cases, we also provide other defense services for licensed professionals in Texas. If necessary, our attorneys can also assist you with the following:
- Voluntary Disclosure – Voluntary disclosure will be a necessary step for mitigating licensed professionals’ risk in some cases. If making a voluntary disclosure is in your best interests, we can advise you and communicate with the IRS’s Criminal Investigation division (IRS CI) on your behalf.
- Federal White-Collar Criminal Defense – We also represent select clients in other federal white-collar criminal defense matters. We have substantial experience helping clients respond to grand jury subpoenas and indictments targeting all types of federal white-collar crimes. This includes experience handling some of the highest-dollar federal criminal investigations in recent Texas history.
- Civil Litigation Defense – We maintain a selective civil litigation defense practice as well. By severely limiting the number of cases we take on at any one time, we ensure that we are able to devote the full weight of our firm’s resources to every matter we handle. If you are facing client litigation in relation to your federal investigation or IRS OPR case, we can assist as warranted.
- Strategic Communication – We also assist our professional license defense clients with strategic communication. Regardless of the veracity of the allegations against you, if these allegations become public, they can do immediate and long-term damage to your professional reputation and your business. We have close working relationships with top public relations and strategic communications firms that we leverage to protect our clients’ interests outside of their pending legal proceedings.
Within all of our areas of practice, we focus on representing high-profile and high-net-worth clients who have a lot to lose. As a result, our attorneys are comfortable handling extremely high-stakes cases, and we have a long track record of protecting our clients’ careers and financial interests in administrative, civil and criminal matters.
Why Choose Brown Tax, P.C. for Professional License Defense?
When you are facing a federal investigation or scrutiny from IRS OPR, you need to have unwavering confidence in your legal representation. So, why should you choose Brown Tax, P.C.? Here are just some of the reasons why attorneys, CPAs and IRS Enrolled Agents in Texas have trusted our attorneys for decades:
- Our Highly-Experienced Legal Team – Led by founder Lawrence Brown, our attorneys have decades of combined experience representing licensed professionals and other clients in high-stakes legal matters. Along with representing attorneys, CPAs, IRS Enrolled Agents and other professionals, we have successfully represented billionaire investors, professional athletes, Grammy award-winning musicians, and a wide range of other extremely high-profile clients.
- Our Specific Experience Representing Licensed Professionals – We focus on doing what we do best. We intentionally limit both the scope of our practice and the volume of clients we represent in order to ensure that we are able to provide the strongest possible defense representation.
- Our Focus on High-Stakes Legal Matters – When you have a lot to lose, you do not want to entrust your legal matters to attorneys who don’t understand or appreciate the gravity of your situation. At Brown, P.C., we know what you have at stake—because we have represented clients in your shoes many times before.
- Our Proactive, Strategic and Collaborative Approach – We take a proactive and strategic approach to protecting our clients by all means available. We also take a highly collaborative approach, both internally within our team and in working with our professional clients. When you choose Brown, P.C., you will feel confident in the course of your representation, and you will be able to get in touch 24/7.
- Our Results in Administrative, Civil and Criminal Matters – Above all, our results speak for themselves. From IRS OPR cases to federal criminal investigations involving hundreds of millions of dollars in potential exposure, we have a track record that few law firms of any size can match. If this is the caliber of legal representation you need, we invite you to contact us to discuss what we can do to help.
Common Allegations Against Tax Professionals in IRS Investigations
Federal investigations targeting licensed tax professionals often target a handful of specific allegations. While these are not the only potential charges that can flow from an IRS investigation, they are among the most common:
Aiding and Abetting Tax Evasion or Tax Fraud
Aiding and abetting tax evasion and tax fraud are federal crimes under Section 6701 of the Internal Revenue Code. “Aiding” and “abetting” are both very broad terms that allow the federal government to pursue criminal charges against tax preparers in a wide range of circumstances. Recommending unsupportable tax positions, assisting with hiding income or claiming fraudulent deductions, and helping to establish unlawful offshore tax avoidance schemes are just a few of numerous examples.
Preparing and Filing Frivolous Returns
Knowingly helping taxpayers prepare and file frivolous returns can also lead to criminal charges for licensed tax professionals in many cases. While receiving insufficient or inaccurate information from a client can serve as a defense in some cases, tax preparers must be able to demonstrate that they met their due diligence burden in order to assert this type of defense. Even then, tax preparers must be able to convince the IRS that their reliance on their clients’ representations was reasonable in order to avoid liability.
Promoting Abusive Tax Shelters
The IRS has placed particular emphasis on targeting licensed tax professionals who “promote” abusive tax shelters in recent years. These include various types of trust arrangements, syndicated conservation easements and loss importation transactions, among others. Licensed tax professionals targeted as promoters can face serious criminal charges, and avoiding a federal indictment requires a coordinated, strategic and proactive defense.
Facilitating Paycheck Protection Program (PPP) or Employee Retention Credit (ERC) Fraud
The IRS has also placed particular emphasis on targeting licensed tax professionals who have helped to facilitate Paycheck Protection Program (PPP) and Employee Retention Credit (ERC) fraud. Widespread fraud under these programs has cost taxpayers billions of dollars, and the IRS is now working alongside the U.S. Department of Justice (DOJ) to pursue charges against tax professionals who assisted their clients with filing fraudulent applications, returns and loan forgiveness certifications.
Conspiracy to Commit Tax Evasion and Tax Fraud
Conspiracy is a common allegation in IRS investigations targeting licensed tax professionals as well. Due to the breadth of the federal criminal conspiracy statute, the IRS and DOJ can pursue conspiracy charges against tax preparers in a wide range of circumstances as well. In federal conspiracy cases, tax preparers can face the same penalties as their clients, and tax advice does not have to lead to “successful” tax evasion or tax fraud to warrant prosecution.
Common Allegations Against Tax Professionals in Civil Litigation and Professional Licensing Matters
While civil litigation and professional licensing matters can (and frequently do) involve the allegations listed above, they can involve many other allegations as well. Other common allegations against licensed tax professionals in these matters include:
Negligence
Tax preparers can face civil liability in professional malpractice litigation and disciplinary action in professional licensing proceedings based on negligence. Specific negligence allegations can take many different forms; and, when accused of negligence, it is critical to identify the specific allegations against you so that you can formulate a targeted defense.
Improper Interpretation or Application of the Law
One example of a specific negligence allegation that is common in professional malpractice litigation and professional licensing proceedings is improper interpretation or application of the law. Essentially, this involves an allegation of providing “bad advice.” When taxpayers face IRS audits or investigations due to positions that they took based on their tax professionals’ advice, they will frequently engage counsel in an effort to hold their tax professionals accountable.
Fraud and Embezzlement
Allegations of fraud and embezzlement committed against tax professionals’ clients can lead to multiple forms of litigation as well. Even if these types of allegations do not trigger criminal scrutiny, they can still expose licensed tax professionals to substantial liability and the possibility of license suspension or revocation.
Conflicts of Interest
Engaging in conflicts of interest, including transactions that involve self-dealing, can likewise create exposure on multiple fronts. These cases tend to be especially intricate and complex, and executing an effective defense strategy will usually begin with gaining an accurate understanding of the facts and contrasting this understanding with the client’s allegations.
Other Ethics Violations
Along with fraud, embezzlement and conflicts of interest, allegations of other ethics violations can also present legal, financial and professional risks. Again, if you need help defending against any type of allegations as a licensed tax professional in Texas—whether in connection with an IRS investigation or otherwise—we encourage you to contact us promptly about consulting with a Texas tax defense attorney at Brown PC.
5 Examples of Defense Strategies for Tax Professionals
For licensed tax professionals, presenting an effective defense during an investigation, disciplinary proceeding or litigation requires a clear and comprehensive understanding of both the relevant facts and the relevant law. Every charge or allegation will require its own custom-tailored defense strategy, and there is no single “right” way to defend against any particular claim of impropriety.
With this in mind, here are five examples of potential defense strategies for tax professionals facing IRS investigations:
1. Compliance with the Internal Revenue Code (or Other Applicable Authority)
Of course, one way to defend yourself is by demonstrating that your advice to your clients fully complies with the Internal Revenue Code (IRC). In some cases, the IRS’s scrutiny simply isn’t warranted. If your Texas tax defense attorney can show that you have complied with the IRC (or other applicable authority), this should be enough to resolve the IRS’s inquiry without further consequence.
2. “Reasonable Basis” for the Tax Position Taken
When defending disclosed tax positions, licensed tax professionals can also avoid further consequence by demonstrating a “reasonable basis” for the position taken. The IRS classifies “reasonable basis” as, “a relatively high standard of tax reporting,” and asserting this defense effectively requires highly experienced legal representation.
3. “Substantial Authority” for the Tax Position Taken
The same is true of presenting the defense of “substantial authority.” When defending an undisclosed tax position, a licensed tax professional must be able to demonstrate “substantial authority” for the position rather than a “reasonable basis.” Thorough documentation is critical—as is the ability to convince the IRS that further enforcement action is unwarranted.
4. Good-Faith Reliance (Adequate Due Diligence)
Good-faith reliance can also be an effective defense in some licensed tax professional investigations. The IRS will consider two types defenses based on good-faith reliance in appropriate cases:
- Good-Faith Reliance on the Client’s Representations – If a licensed tax professional conducts adequate due diligence and relies on a client’s false or misleading representations in good faith, this reliance can serve as a defense to the IRS’s allegations of aiding and abetting, fraud, or other misconduct.
- Good-Faith Reliance on the Advice of Tax Counsel – Good-faith reliance on the advice of tax counsel can be a sound defense as well. This includes, but is not limited to, tax counsel’s opinion on the “reasonable basis” or “substantial authority” for a position taken.
5. Insufficient Evidence of Noncompliance
To pursue charges against a licensed tax professional, the IRS must have sufficient evidence to substantiate its allegations. As a result, if your Texas tax defense attorney can demonstrate that the IRS’s evidence is insufficient to prove noncompliance, this can be enough to stop the IRS from moving forward.
The Importance of Experienced Legal Representation for Licensed Tax Professionals
Facing allegations of negligence, fraud or other misconduct can present multiple risks for licensed tax professionals. One legal proceeding can lead to another, and licensed tax professionals can quickly find themselves facing litigation on multiple fronts. Thus ensuring that you have experienced legal representation can be crucial for:
Avoiding IRS Penalties
The IRS has the authority to directly impose certain penalties on licensed tax professionals, including civil monetary penalties and suspension or revocation of enrollment with the IRS.
Avoiding Criminal Charges
IRS investigations also can (and do) lead to criminal charges in many cases. Licensed tax professionals accused of aiding and abetting, fraud, and other crimes can face substantial fines and prison time.
Avoiding Civil Liability
In many cases, IRS investigations will also trigger lawsuits from the clients involved. Even if you have professional liability insurance, asserting an effective defense will be critical for your long-term protection.
Avoiding Professional Discipline
IRS investigations, criminal charges and civil lawsuits can also lead to professional discipline. If your license is in jeopardy, you will need an experienced Texas tax defense attorney to represent you in your disciplinary proceeding as well.
Highly Experienced Defense Counsel for Licensed Tax Professionals in Fort Worth, TX
So, how can we help you? If you need experienced, effective and unrelenting defense counsel for a federal investigation or IRS OPR case, we encourage you to contact us to learn more about our practice. If we’re a good fit, we can get to work defending you immediately. With offices in Fort Worth, we represent licensed professionals in Texas and in other states across the country.
Experienced Legal Representation for Texas Attorneys Facing IRS, DOJ and IRS OPR Investigations
Attorneys accused of helping their clients violate the Internal Revenue Code (IRC), Bank Secrecy Act (BSA) and other federal statutes can face serious consequences. These consequences can include not only disciplinary action (up to and including disbarment), but also civil or criminal penalties in many cases. At Brown, PC, we have significant experience representing attorneys in federal tax-related matters.
This experience includes representing attorneys during Internal Revenue Service (IRS) and U.S. Department of Justice (DOJ) investigations as well as providing representation for IRS Office of Professional Responsibility (OPR) matters. In many cases, one will lead to the other, and avoiding unnecessary consequences will require a coordinated and highly strategic defense. Our attorneys have the experience needed to provide effective representation, and we can get to work on your defense immediately if necessary.
Representation for Attorneys Facing Scrutiny Related to Their Representation of Taxpayers
We represent attorneys facing all forms of scrutiny in relation to their representation of taxpayers. This includes providing tax advice as well as providing representation before the IRS (including as an enrolled agent). Attorneys can face various allegations in both capacities—all of which have the potential to lead to disciplinary action and other consequences. This includes (but is not limited to) allegations such as:
- Assisting with the development and implementation of abusive tax shelters
- Assisting with the submission of fraudulent claims for the Employee Retention Credit (ERC) and Paycheck Protection Program (PPP) loan forgiveness
- Helping taxpayers fraudulently claim other exemptions, credits and refunds
- Preparing false and fraudulent information returns and supporting documentation
- Otherwise aiding and abetting the submission of fraudulent documents or statements to the IRS
The IRS has the authority to directly impose civil monetary penalties against attorneys suspected of aiding and abetting (among other civil statutory violations). The IRS’s Criminal Investigation division (IRS CI) also routinely works with the DOJ to substantiate criminal charges for aiding and abetting, conspiracy, and other federal crimes. Even when the financial consequences of a statutory violation are minimal, paying the fine can trigger automatic scrutiny from the IRS OPR—and this can lead to censure, suspension or permanent disbarment.
Given these risks, attorneys targeted in federal tax-related investigations cannot afford to take chances. An informed, strategic and proactive defense is critical. With our experience handling extremely high-stakes federal tax matters for both taxpayers and their advisors, we can effectively deal with the IRS, DOJ or IRS OPR on your behalf and help resolve your investigation as quickly, quietly and favorably as possible.
Speak with a Federal Defense Lawyer at Brown, P.C.
As noted above, we limit our professional license defense practice to representing high-profile and high-net-worth clients who are facing disciplinary action and other substantial legal risks. If you think our firm might be right for you, we invite you to get in touch. To request a confidential consultation with a federal defense lawyer at Brown, P.C., please call 817-870-0025 or tell us how we can contact you online today.