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Dealing with the Government's Criminal Tax Investigators

As a defense attorney, you should always be forthright in dealing with government personnel while your client is under investigation for tax crimes. When the tax crime case goes through the usual steps beginning with an investigation by IRS special agents, defense counsel typically interacts mainly with Criminal Investigation Division personnel. In all communications with CI, the defense counsel should aim to demonstrate familiarity with the facts of the case, knowledge of tax law, the elements of the crime for which the taxpayer is being investigated, and the procedures and investigative techniques being used by the CI Division.

Make Sure to File Power of Attorney for the Taxpayer

In order to formally represent a client in front of the IRS, counsel must specifically request authorization to do so through power of attorney. The customary document used to request power of attorney is IRS Form 2848, “Power of Attorney and Declaration of Representative.” This POA request form should be given to the IRS special agent as soon as counsel first makes his or her representation of the taxpayer known. A second POA form should be filed with the IRS’s computerized Central Authorization File (CAF). The reason for this POA form is to put other departments of the IRS on notice that the taxpayer has an authorized representative and should not be personally approached by IRS personnel. This step is very important because it protects the taxpayer from having to deal with IRS personnel himself; the point of contact with IRS personnel should be the attorney instead. Once counsel is retained and a POA is filed, the special agent will typically not attempt to make contact with the taxpayer directly. However, the IRS may still attempt to use covert contacts (such as an undercover agent) to try to obtain information from the taxpayer directly.

Drafting Correspondence with Government Personnel

In any correspondence with the government, it is a good idea to assume that the content of the correspondence will be closely scrutinized. Any factual statements made in a correspondence to the IRS must be carefully reviewed to ensure that they are not misstatements or misleading. If legal arguments are included in the correspondence, they should be thoroughly researched and incorporate any recent developments. In general, written correspondence with the IRS on the topic of discovery and evidentiary matters is almost always preferable to filing motions, which take up unnecessary time and may result in disclosure of private tax return matters or Grand Jury details. If the government discloses private tax information in responding to a motion filed by the taxpayer, then that information can potentially be used in a later civil proceeding. For this reason, it is typically wise to attempt to settle such disagreements with the IRS through informal correspondence rather than formal court action.

The Role of Counsel in Criminal Investigation Conferences

A taxpayer under investigation by the CID for tax related criminal offenses has the opportunity to participate in several formal conferences with the local CI Special-Agent-in-Charge before a formal prosecution recommendation is made to the DOJ. Once the case is sent to the DOJ Tax Division for prosecution recommendation, the taxpayer can then participate in a formal conference with the Criminal Section of the DOJ Tax Division. If the taxpayer wishes to participate in the available conferences, his or her tax attorney should inform the special agent in charge that the taxpayer intends to pursue all conferences available. The letter sent by counsel should also request that a note to that effect be placed in the taxpayer’s CI file. A similar letter should also be sent to the DOJ Tax Division once it becomes clear that a formal prosecution recommendation has been made.

Counsel should rarely give up an opportunity to represent their clients at a CI conference. Conference presentations usually involve reports of expert witnesses, polygraph test results, legal and policy arguments, audio and video recordings, and statements by other witnesses. Although the information is likely to be presented in a one-sided fashion by the CI personnel, conferences are still worth attending because they give counsel the opportunity to learn about the specific tax charges that are likely to be prosecuted and the results of the special agent’s investigation. At pre-indictment conferences, counsel actually has the opportunity to dissuade the special agent from recommending prosecution to the DOJ. The following factual arguments made by counsel can be helpful in dissuading prosecution or lessening the harsh effects of prosecution:

  • Presenting an argument that evidence has been misrepresented;
  • Presenting evidence that a valid reliance defense or proof of negligence only was erroneously rejected by the IRS;
  • Demonstrating that the method of proof of income used was deficient;
  • Demonstrating lack of IRS credibility.

While conferences are generally beneficial to the taxpayer, it is important to remember that admissions or arguments made during them can be used against the taxpayer in subsequent proceedings, or can result in expansion of prosecution to include other taxable periods or additional tax offenses. Any conference presentations should be carefully drafted and rehearsed by counsel. When submitting documents during conferences, make sure that they contain no incriminating evidence.

How a Tax Attorney Can Help with Your Criminal Tax Case

If you are under investigation by the IRS for a potential criminal prosecution, then you must consult with an experienced tax attorney. San Diego Tax Attorney William D. Hartsock has been successfully helping clients with criminal tax issues since the early 1980s. Mr. Hartsock offers free consultations with the full benefit and protections of attorney client privilege to help people clearly understand their situation and options based on the circumstances of their case. To schedule your free consultation simply fill out the contact form found on this page, or call (858) 481-4844.


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The Tax Lawyer - William D. Hartsock, Esq. – San Diego Tax Attorney

Author: William D. Hartsock, Esq

A "Certified Tax Law Specialist" for over 37 years, Mr. Hartsock is one of the most trusted and respected tax attorneys in Southern California. Call today to discuss the facts of your case and learn about your options. Mr. Hartsock offers free consultations and all conversations are protected under attorney-client privilege; meaning that no information shared with a tax attorney will be shared with the IRS or California Franchise Tax Board.