Getting the Facts
There’s a big difference in cases depending on how serious the allegations are and how much evidence the prosecution has. Tax preparers are most frequently prosecuted for filing false returns, or for aiding someone else in filing false returns. This is a difficult position for the government to hold. For the charges to stick, the investigators need solid proof that the tax preparer was aware that the tax return information was false. If they weren’t aware, they can’t be held responsible for doing their job.
Sometimes the government can’t prove a person’s intentions exactly. But they may be able to compile circumstantial evidence. If a tax preparer only has one mistake in their returns, it’s difficult for the government to make a case. But if the preparer’s returns show consistent errors in an intentional pattern, then investigators may be able to begin a court proceeding.
When people are being investigated, they’re much more likely to be prosecuted if they provide completely unbelievable tax information. If the tax return is so blatantly incorrect that a tax preparer must have noticed it, federal investigators are more likely to assume that it was noticed.
How the Investigation Works
When a tax preparer is investigated, usually the case will be handled by the Criminal Investigations Division of the IRS.
One of the first steps that an investigator will take is to interview the tax preparer’s other clients. Tax preparers may be told about the federal investigation by these clients. It’s important to the government to have early stories from the former clients, before they’ve had a chance to prepare for the investigation and get their stories straight.
Many of the preparers who are investigated will defend themselves by saying that they recorded exactly what their client told them. Because of this, the investigator’s interview will often include questions about how a tax preparer gets client information.
The Method of Payment
When defending tax preparers, one factor that can influence the case is how they receive their payment. Tax preparers who receive a portion of the refund are much more likely to be prosecuted. Taking the refund means that you have motive to make the refund as large as possible, even if you have to engage in criminal activity to get it.
In a similar vein, if the preparer does many returns while taking a flat fee, the government might find that suspicious. They may suspect that the preparer is falsifying his client’s tax returns so that they’re encouraged to come back to his business.
The Final Result
The final result of the case varies a lot depending on the circumstances. With a good criminal defense lawyer, you may be able to avoid a conviction or settle out of court. If you haven’t yet been charged, early intervention by a criminal defense lawyer can help keep you from suffering criminal charges.
Attorneys can take steps to control the direction of an investigation, helping to alter the odds of the plaintiff being charged.
By being prepared and knowing your rights, you can take proactive steps to minimize your chances of being charged.
What to Do
As soon as you’re aware that you’re the subject of an investigation, you should contact an experienced defense attorney. Discuss the situation with them so that they can create a plan to move forward.
One of the most important things is never to talk to federal agents without your lawyer present. They may act like they’re trying to help. They may also lie and tell you that you aren’t the subject of the investigation. Federal agents are allowed to lie in their investigations, but you aren’t.
Everything you say to law enforcement will be used against you later. Your lawyer’s job is easiest if you call them immediately and let them handle everything.