Who Are IRS Special Agents and What Should I Do If They Contact Me?

The IRS police force is called the "Criminal Investigation Division" (CI). This branch has 3,000 employees, 2,000 of whom are called "Special Agents." IRS Criminal Investigation Special Agents are spread throughout the United States and abroad.

Special Agents won't audit you or collect money from you to pay your taxes. Their sole purpose is to put tax cheats in prison.

What Is an IRS Special Agent?

Again, IRS Special Agents represent the CI department of the IRS. If you've been contacted by Special Agents from the IRS, it means that the IRS might believe that you have committed a tax crime and are conducting a criminal investigation about you and/or your business. The IRS Special Agents are the individuals who will determine whether your case should be referred for criminal prosecution.

IRS Special Agents are armed and have badges but no uniforms. Still, they're detectives highly trained by the IRS and FBI. Special agents travel in pairs for their protection and to corroborate oral evidence gathered during an investigation.

General and Special Enforcement Sections

The CI is divided into general and special enforcement sections. Special enforcement targets organized crime, drugs, and unions. General enforcement watches ordinary taxpayers and everything else. The CI also investigates nontax financial crimes like money laundering.

When Does the IRS Send Special Agents to Contact You?

The IRS will only send out its elite police if it has strong indications of wrongdoing. Generally, cases involving less than $20,000 in taxes are rarely investigated.

A criminal investigation starts with Special Agents interviewing the taxpayer's friends, business associates, professional advisers, and anyone else who might have information. Even your spouse might be contacted. Your mail could be monitored, in cooperation with the USPS. While the IRS can't open and read your mail, it can follow leads they get from return addresses. The CI might get copies of bills from phone and credit card companies, follow you, go through your garbage, or get a court order authorizing a phone tap.

The Special Agents then usually invite the targeted individual to speak to them.

How Will the IRS Special Agent First Make Contact With Me?

Your initial contact with the IRS is usually unexpected. Traditionally, the IRS Special Agents travel in pairs and try their best to catch you off guard when you're least ready and, more importantly, least "prepared" to meet them. For example, the Special Agents might be waiting by your car on your return from the health club or leaving a restaurant after dinner. The IRS Special Agents might also be waiting for you outside of your workplace or home.

In other words, your initial communication from the IRS will most likely not be a scheduled meeting. You shouldn't engage in a conversation with them or answer any questions at this time. You'll likely do more harm than good by saying anything. Keep in mind that anything you say can be used against you. So, don't give the Special Agents any information. Answer only the question, "Are you [your name]?" and say that you want to contact an attorney. Faced with a barrage of questions from two trained Special Agents who show up unannounced, most people blurt out a confession or an obvious lie right away—even when answering simple questions like "Who are your business associates?" or "Have you reported all of your income?" So, talk to a tax lawyer before talking with the Special Agents.

By the time the Special Agents contact you, they've probably reviewed lots of records and talked to many potential witnesses who know about your financial affairs. At this point, it's likely you are about to be recommended for prosecution. The CI's purpose for questioning you is to get a confession or other damaging admission, just to solidify the case.

But don't contact a lawyer while the Special Agents are still present unless they threaten you with immediate arrest if you don't cooperate. After they leave (and you're able to speak freely), call an attorney.

Why Do the IRS Special Agents Want to Catch Me Off Guard?

That's simple. It is important to remember that the goal of the IRS Special Agents is to try to obtain information from you involving a criminal matter. The IRS knows that once you understand the ramifications of being criminally investigated by the IRS, you will most likely "lawyer up."

And, as any first-year law school student will tell you, it is almost never advisable to speak with the investigators during a criminal investigation unless an amnesty or immunity deal has already been reached.

Will the IRS Special Agents Read Me My Miranda rights?

When the IRS Special Agents are investigating you, you haven't yet been formally detained or charged with a crime. Because you haven't (yet) been charged with a tax crime, they probably won't read you your Miranda rights. Therefore, you don't technically have the right to be appointed counsel. That doesn't mean that you shouldn't contact a criminal-tax attorney if you've been contacted by the IRS Special Agents. But unlike in the movies, the court isn't going to appoint you an attorney simply because you're being investigated for a possible tax crime.

Will the IRS Special Agents Charge Me With a Crime?

The IRS Special Agents don't charge people with a crime. Rather, the IRS Special Agents present their findings of the investigation to their supervisor. Then, the Special Agent and the supervisor will determine whether the matter should be referred for a subject criminal investigation or be discontinued.

If the IRS recommends further investigation, then the case is evaluated by criminal tax attorneys within the IRS, and a determination will be made whether the case should be referred for prosecution to either the Department of Justice's Tax Division or to the United States District Attorney if the investigation reveals additional nontax related crimes.

Can a Civil IRS Audit Turn Into a Criminal Investigation?

Yes, but there are some rules the IRS has to abide by. For example, during the civil audit, the moment an IRS Auditor believes that the taxpayer might have committed a crime, they must instantly cease the civil audit. That's because the government can't use a civil audit to probe a criminal inquiry.

As a side note, generally, the Auditor will not tell you that they believe a crime has been committed. Rather, when you try to follow up with the Auditor to obtain the tax assessment or obtain some additional information regarding the audit, you will find that the Auditor has gone radio silent.

Do the IRS Special Agents Charge Everyone With a Crime?

It's important to remember that not every criminal investigation by the Special Agent results in criminal prosecution. It's not uncommon for a scorned ex-lover or spouse, former business partner, or even a competitor to contact the IRS Special Agents and provide information that's not entirely accurate. Once the IRS Special Agents determine that a crime wasn't committed, they drop the investigation.

Should I Talk With the IRS Special Agents If I Know I am Innocent?

Again, you generally shouldn't speak directly with the IRS Special Agents before talking to a lawyer. While you might believe that you aren't guilty of any crime, your actions might actually have constituted another crime that you were unaware of.

Also, as you get nervous, you could say things you don't mean, or your sentences might become rambling and unclear and appear as if you're trying to "hide" something.

Talk to a Tax Lawyer If You're Visited by an IRS Special Agent

Remember, the IRS Special Agents are visiting you because they believe you might be guilty of a crime and will do everything they can to try to obtain information to substantiate these allegations. As such, it's best to defer talking to them and get a criminal tax attorney immediately.

To learn more about dealing with Special Agents and the IRS, get Nolo's Stand Up to the IRS, by Frederick W. Daily and Stephen Fishman.