The IRS Special Agents represent the Criminal Investigations department of the IRS. If you've been contacted by Special Agents from the IRS, it means that the IRS may 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.
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 are least ready, and more importantly least “prepared” to meet them. For example, the Special Agents may be waiting by your car on your return from the health club or leaving a restaurant after dinner. The IRS Special Agents may 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.
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.
They should, but whether or not they do will depend on the particular agents. When the IRS Special Agents are investigating you, you have not yet been formally detained or charged with a crime, and therefore, you do not technically have the right to be appointed counsel. That does not mean that you should not contact an attorney if you have been contacted by the IRS Special Agents. But unlike in the movies, the court is not going to appoint you an attorney simply because you're being investigated for possible tax crime. Learn more about Miranda Rights.
The IRS Special Agents do not 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.
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 may have committed a crime, he or she must instantly cease the civil audit. That is because the government cannot use a civil audit to probe a criminal inquiry.
As a side note, generally the Auditor will not tell you that he or she believes a crime has been committed. Rather, when you try to follow up with the Auditor in order to obtain the tax assessment or obtain some additional information regarding the audit, you will find that the Auditor has gone radio silent.
It is important to remember that not every criminal investigation by the Special Agent results in criminal prosecution. It is 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 is not entirely accurate. Once the IRS Special Agents determine that a crime was not committed, they drop the investigation.
Generally, you should not speak directly with the IRS Special Agents. While you may believe that you are not guilty of any crime, your actions may actually have constituted another crime that you were unaware of. Also, as you get nervous, you may say things you don't mean, or your sentences may become rambling and unclear and appear as if you are trying to “hide” something.
Remember, the IRS Special Agents are visiting you because they believe you may be guilty of a crime and will do everything they can to try to obtain information in order to substantiate these allegations. As such, it is usually best to obtain a tax attorney if you are faced with possible criminal charges.