Criminal Defense Lawyers

IRS Criminal Investigation Agent Wants to Talk About My PPP Loan

The phone rings. The caller identifies themselves as a Special Agent with IRS Criminal Investigation. They want to discuss your PPP loan. Your first thought might be relief – at least it’s not the FBI. That thought is wrong. IRS Criminal Investigation is not the regular IRS. This is the criminal enforcement arm of the tax system, and their involvement in your PPP case means something very specific: they’re not just looking at the loan anymore. They’re looking at your taxes. And they’re about to multiply your legal problems.

Here’s what most people don’t understand about IRS-CI. This agency has a 97.4 percent conviction rate in COVID fraud prosecutions. That’s not a typo. Nearly ninety-eight out of every hundred people they prosecute get convicted. The FBI doesn’t have those numbers. No federal agency does. And now they want to talk to you about your PPP loan. If you’re thinking about explaining your situation, about clearing up what you’re sure is a misunderstanding, you need to understand what you’re actually dealing with first.

IRS-CI special agents are not auditors sending you letters about documentation. They’re federal law enforcement officers with badges, guns, and arrest authority. They’re forensic accountants with the power to put you in prison. And they have access to information that even the FBI has to request through formal channels. When an IRS-CI agent calls about your PPP loan, the investigation has been running for months. They’ve already pulled your tax returns. They’ve already compared your PPP application to your actual payroll filings. They’ve probably already talked to your accountant. That phone call isn’t the start of anything. It’s closer to the end.

IRS-CI Is Not the Regular IRS – This Is the Criminal Enforcement Arm

Most people hear “IRS” and think about audits, tax forms, and maybe some penalties. Thats not what IRS Criminal Investigation does. IRS-CI is the only federal law enforcement agency in the United States with authority to investigate criminal violations of the Internal Revenue Code. Not the FBI. Not the DOJ. Only IRS-CI.

Think about what that means. The FBI can investigate you for bank fraud related to your PPP loan. They can investigate wire fraud. They can investigate conspiracy. But if theres a tax angle – and there almost always is in PPP cases – only IRS-CI can bring those charges. And IRS-CI special agents have something no other federal agents have: unchallenged access to your tax records.

When the FBI wants your bank records, they subpoena the bank. When they want witness testimony, they conduct interviews. But when IRS-CI wants your tax returns, they dont need to subpoena anyone. They already have them. Your 1040s, your Schedule Cs, your W-2s, your quarterly 941 payroll filings – all of it is sitting in IRS databases. IRS-CI agents can access that information directly. They dont need your permission. They dont even need to tell you theyre looking.

Heres the thing about the 97.4 percent conviction rate. It tells you exactly what kind of agency your dealing with. IRS-CI dosent bring cases they might lose. They bring cases theyve already won on paper. By the time an IRS-CI special agent picks up the phone to call you, someone has already reviewed the evidence and concluded that a conviction is virtually certain. That phone call isnt a fishing expedition. Its the final step before charges are filed.

Why IRS-CI Contact Is Actually Worse Than FBI

If you had a choice between being investigated by the FBI or IRS-CI for your PPP loan, you should choose the FBI. That might sound counterintuitive. The FBI has a bigger reputation. They show up in movies. But when it comes to PPP fraud, IRS-CI involvement is actualy worse. Much worse.

The reason is charge stacking. The FBI can charge you with bank fraud, wire fraud, and making false statements. Thats bad enough. But IRS-CI can add tax crimes on top of those charges:

• Tax evasion
• Filing false returns
• Money laundering

Every dollar of PPP money that went somewhere it shouldnt have created a tax event. If you used PPP funds for personal expenses, that was taxable income you probly didnt report. If you inflated your payroll numbers on the PPP application, those numbers dont match what you reported to the IRS – and that discrepancy is evidence of tax fraud.

Heres the uncomfortable truth nobody wants to hear: IRS-CI involvement means your facing multiple categories of federal charges, not just one. Your PPP fraud case just became a tax fraud case too. And potentially a money laundering case. The penalties stack. The prison time stacks. The fines stack.

FBI involvement is serious. IRS-CI involvement is catastrophic.

And theres another reason IRS-CI is worse. There special agents are forensic accountants by training. Following money is literaly there job. While FBI agents are generalists who investigate everything from bank robbery to terrorism, IRS-CI agents specialize in financial crime. They know exactly how to trace funds through bank accounts. They know how to spot discrepancies between applications and tax filings. They know how to build cases that are nearly impossible to defend. Thats why the conviction rate is 97.4 percent.

What They Already Know About Your Taxes and Your PPP Application

Before that IRS-CI agent ever called you, they did there homework. Lets talk about what they already have.

First, they have your PPP loan application. They know exactly what you claimed – how many employees, what payroll figures, what gross income. They have the documentation you submitted to the bank. They have the forgiveness certification if your loan was forgiven.

Second, they have your tax returns. Your personal 1040. Your business Schedule C or corporate returns. Your quarterly 941 payroll tax filings that show exactly what you paid employees and when. Your W-2s and 1099s. All of it. And theyve compared every number on your PPP application to every number on your tax filings.

Heres were most people get destroyed. The PPP application asked for average monthly payroll. People estimated. People rounded up. People included expenses that werent actualy payroll. And now IRS-CI has the actual numbers from your 941 filings. If your PPP application said $50,000 monthly payroll but your 941s show $30,000, thats a $20,000 discrepancy theyve already documented.

Third, and this is critical, theyve probably already interviewed your accountant. In roughly eighty percent of PPP fraud prosecutions, accountant testimony plays a role. Your accountant prepared your taxes. They know what your actual payroll was. And when IRS-CI showed up asking questions, your accountant told them everything. Not becuase there a bad person. Becuase there terrified of being charged as a co-conspirator.

Your accountant has already talked. Assume they disclosed everything.

So when that IRS-CI agent calls you, there not calling to gather information. They already have the information. There calling to hear your version of events and compare it to what they already know. Every inconsistancy between your story and the documents becomes evidence. Either evidence of the underlying fraud, or evidence of making false statements to federal agents.

How Your PPP Loan Becomes a Tax Crime

Lets walk through how a PPP loan case turns into a tax case. This is the cascade that destroys people who dont understand what IRS-CI is actualy investigating.

You apply for a PPP loan in 2020. You inflate your payroll numbers a little to get a bigger loan. Maybe you include yourself as an employee when you werent really taking a salary. Maybe you include contractors who should of been reported on 1099s, not counted as W-2 employees. Maybe you just estimated high becuase you didnt have exact numbers handy. The loan gets approved. The loan gets forgiven. You think its over.

But heres what actualy happened. The payroll numbers you claimed on your PPP application dont match the payroll numbers you reported to the IRS. Thats a discrepancy. And that discrepancy works both ways.

If you inflated your payroll for the PPP loan, you probly underreported your taxes. After all, payroll taxes are expensive. Nobody inflates payroll to the IRS. So now you have a PPP application showing $50,000 monthly payroll and tax filings showing $30,000 monthly payroll. IRS-CI sees this and asks: were you lying to the bank, or were you lying to the IRS? Either way, someones getting charged.

And it gets worse. Those PPP funds you recieved – if you used any of them for personal expenses, that was taxable income. Did you report it? If your loan was forgiven, did you properly account for the forgiveness on your tax returns? Every dollar creates a tax question. Every tax question creates potential criminal exposure.

This is the charge-stacking problem. You started with potential bank fraud charges. Now your facing bank fraud plus tax evasion plus filing false returns plus money laundering. Carl Torjagbo from Marietta, Georgia got convicted of $9.6 million in PPP fraud AND $3.4 million in tax fraud. He faces up to 170 years in prison. Not becuase of the PPP fraud alone. Becuase IRS-CI added the tax crimes.

The Charge-Stacking Problem – Why IRS-CI Cases End in Multiple Convictions

Let me explain exactly how bad charge stacking can get. Heres what your potentially facing when IRS-CI is involved:

• Bank fraud under 18 USC 1344 – up to 30 years in prison and $1 million in fines
• Wire fraud under 18 USC 1343 – up to 20 years
• Tax evasion under 26 USC 7201 – up to 5 years per count
• Filing false returns under 26 USC 7206 – up to 3 years per count
• Money laundering under 18 USC 1956 – up to 20 years
• Making false statements under 18 USC 1001 – up to 5 years

And heres the kicker. These charges dont run concurrently by default. A judge can stack them. You could be looking at decades in federal prison, not just years.

Renetta Golden-Larimore from Kansas City had her PPP loans forgiven in 2021. She thought she was safe. Four years later, in 2025, she was sentenced to 51 months in federal prison. Forgiveness meant nothing. The investigation was already running. And when IRS-CI finished building there case, the conviction was inevitable.

The average sentence in IRS-CI COVID fraud prosecutions is 31 months. Thats almost three years in federal prison. And thats the average. Defendants with larger loan amounts, multiple fraudulent applications, or additional charges face much longer sentences.

Think about what happens to your life during three years in federal prison. Your business closes. Your employees lose there jobs. Your family struggles. Your professional licenses get revoked. Your reputation is destroyed. And when you get out, your a convicted felon who cant vote, cant own firearms, and will struggle to find employment for the rest of your life.

Thats whats at stake when IRS-CI calls about your PPP loan.

The Multi-Agency Task Force – IRS-CI Dosent Work Alone

Heres something else you need to understand. IRS-CI dosent investigate PPP fraud in isolation. Theres a federal task force specifically created to coordinate pandemic relief fraud prosecutions. IRS-CI works alongside the FBI, the SBA Office of Inspector General, the DOJ Fraud Section, and other agencies. They share information. They coordinate investigations. They prioritize cases together.

What this means for you is simple. When IRS-CI contacts you, the FBI probly already knows about your case. The SBA-OIG has probly already flagged your loan. Your not dealing with one agency. Your dealing with a coordinated federal response that has unlimited resources and a decade to prosecute you.

Since the CARES Act passed, IRS-CI has launched over 2,039 COVID fraud investigations totaling more then $10 billion in attempted fraud. Over a thousand people have been indicted. Hundreds have been sentenced. And the statute of limitations dosent expire until 2030 or later for most PPP loans. There in no rush. There methodicaly working through cases, building the strongest possible prosecutions, and securing convictions at nearly 98 percent.

The task force structure also means that evidence flows freely between agencies. The bank records the FBI pulled are available to IRS-CI. The tax discrepancies IRS-CI found are available to DOJ prosecutors. The witness interviews from one agency get shared with all the others. Your facing a coordinated assault from multiple directions, and there all talking to each other about you.

This is why the conviction rate is so high. By the time any single agent contacts you, multiple agencies have already contributed to building your case. The investigation isnt happening in a silo. Its happening across the entire federal law enforcement apparatus.

What You Should Do When IRS-CI Contacts You

So what do you do when an IRS Criminal Investigation special agent contacts you about your PPP loan? The answer is simple but feels counterintuitive: you dont talk to them. Not without an attorney. Not ever.

First, verify there identity. IRS-CI agents carry credentials. You can use the IRS Employee Verification Tool to confirm they actualy work for IRS-CI. Scammers sometimes impersonate federal agents.

Second, tell them you need to consult with an attorney before answering any questions. This is your constitutional right under the Fifth Amendment. You cannot be compelled to be a witness against yourself. Refusing to answer questions without an attorney present is not obstruction of justice. Its not evidence of guilt. Its a fundamental protection that exists specificaly for situations like this.

Third, hire a federal criminal defense attorney immediatly. Not tomorrow. Not next week. Today. You need someone who understands IRS-CI investigations, who understands how tax crimes interact with fraud charges, who can analyze your exposure and develop a defense strategy. This is not the time for a general practice lawyer who handles divorces and car accidents. You need specialized federal defense counsel.

Heres the decision matrix your actualy facing:

• Option one: talk to the IRS-CI agent, try to explain the discrepancies, and give them exactly what they need to convict you
• Option two: exercise your rights, hire competent counsel, and give yourself a chance to understand your situation before making any statements

Theres no third option were you explain everything and they decide not to prosecute. That option dosent exist when IRS-CI is involved.

Your attorney can contact IRS-CI on your behalf. They can negotiate the terms of any interview. They can explore whether theres an opportunity for cooperation that might reduce your exposure. But all of that happens through proper legal channels, with protections in place, after your attorney has reviewed the evidence and understands your case.

Fourth, gather your records. Every PPP loan document, every bank statement, every payroll record, every tax return. Give these to your attorney. They need to understand exactly what IRS-CI is looking at so they can assess your exposure and develop a strategy. This is completly different from handing documents to the goverment. Your attorney uses these to protect you. The goverment uses them to prosecute you.

Fifth, dont talk to anyone else about the investigation. Not your business partners. Not your employees. Not your family members who might get called as witnesses. Anything you say to anyone can potentialy be used against you. The only person you should discuss this with is your attorney, becuase attorney-client communications are privileged.

The Clock Is Running – But Not How You Think

One final thing. Congress extended the statute of limitations for PPP fraud to ten years. If you took out a PPP loan in April 2020, the goverment has until April 2030 to charge you. Thats not a short window. Thats nearly a decade of looking over your shoulder, wondering if today is the day.

But heres what most people get wrong. They think time is on there side. They think if the goverment hasnt charged them yet, maybe they never will. Thats not how IRS-CI works. There methodical. There patient. There building cases one at a time, and there securing convictions at 97.4 percent. The fact that you havent been charged yet dosent mean your safe. It might just mean your not at the top of the list yet.

Renetta Golden-Larimore had her loans forgiven in 2021. She probly thought she was in the clear. Four years later, she was sentenced to 51 months. The investigation was running the entire time. She just didnt know it.

Thats the reality your facing. IRS-CI has resources, time, and a nearly perfect conviction rate. If theyve contacted you, theyve already decided your case is worth pursuing. The only question now is how much evidence you give them.

The 97.4 percent conviction rate tells you everything you need to know. IRS-CI dosent call people to have friendly conversations. They call becuase theyve built a case and there ready to close it. Your job now is to not make that case any stronger. Call an attorney instead.