What Kind of Attorney Do I Need for an IRS Audit?

When a Tax Audit Could Turn into a Criminal Tax Investigation

If there is any possibility that an IRS civil examination might pivot toward criminal tax exposure, you should retain an IRS attorney immediately. IRS Criminal Investigation Division (IRS-CI) conducts clandestine inquiries into suspected violations of the Internal Revenue Code and related financial crimes, then appears only after a record has been built.

Warning signs include: prior unfiled returns or willful omissions, false documents, use of nominees, a sudden pause in an audit after “badges of fraud” are discussed, or contact by special agents. In these settings, do not rely on your original preparer. Communications with non-attorney preparers are generally not privileged, and they can be compelled to testify. By contrast, a dual-licensed IRS attorney & CPA places attorney-client and work-product protections around your matter and can extend privilege to consulting accountants through a Kovel arrangement, which preserves necessary accounting support while protecting your statements. This professional posture is essential in classic “eggshell” audits and in “reverse-eggshell” situations where a civil audit proceeds in parallel with a hidden criminal tax inquiry.

Typical triggers to hire dual-licensed tax attorneys and CPAs immediately:

• Unannounced visit or contact by IRS agents.
• An examiner references fraud indicators or refers your case to a Fraud Enforcement Advisor.
• Your preparer is under criminal tax investigation, or you learn of IRS civil or criminal tax enforcement action involving positions, schemes, strategies, utilized on your tax returns.
• You are asked for interviews or affidavits about intent, records appear altered, or nominees were used.

When You Need Protected, Strategic Remediation: Voluntary Disclosure and Offshore or Digital-Asset Issues

If your history includes willful noncompliance, the IRS Voluntary Disclosure Practice is the primary path to resolve past conduct while seeking to avoid a criminal tax referral. Entry is a two-step submission on Form 14457: preclearance with IRS-CI, followed by a detailed disclosure within 45 days if precleared. Accepted matters move to a civil examiner to audit your tax advisor’s computation of tax, interest, and civil tax penalties. Timeliness is critical. A disclosure is not timely if the IRS has already initiated an exam, criminal tax investigation, or received incriminating third-party information. Your attorney coordinates the narrative, documents, and payment arrangements and ensures that your statements remain within privilege. For non-willful conduct, your attorney evaluates Streamlined Filing Compliance Procedures or other delinquent-submission options, and explains the limits and risks of “quiet” disclosures & self-amendments. Offshore income, FBAR and FATCA reporting, foreign corporations or trusts, and digital-asset activity often sit at the center of these engagements and require precise factual development before any filing.

Dual-licensed Tax Attorneys & CPAs who focus on criminal tax risk also understand crypto-specific enforcement. IRS initiatives, including blockchain analytics and John Doe summonses to major platforms, have produced large civil exam pipelines and, where warranted, criminal tax referrals. If your digital-asset tax reporting is incomplete, counsel can reconstruct basis and transactions, amend filings, and choose the correct remediation track, all while controlling the record.

An experienced dual-licensed IRS Tax Attorney & CPA helps you manage Office, Field, and Correspondence audits, controls interviews, and builds a record that positions your case for the Independent Office of Appeals, which is designed to resolve disputes fairly without litigation. If you receive a Notice of Deficiency, counsel can file a timely Tax Court petition to preserve your prepayment forum, typically reopening settlement channels with Appeals and, where appropriate, discussions with Chief Counsel. Where collection is the focus, attorneys can request a Collection Due Process hearing to pause levies after final notice, or the Collection Appeals Program to contest proposed or actual collection actions. Strategic use of these forums often yields settlements grounded in hazards-of-litigation analysis without trial.

Controversies Suited to Attorney Representation

• Accuracy-related and civil fraud tax penalties, substantiation disputes, and method-of-accounting issues.
• Partnership examinations under the BBA centralized partnership audit regime, corporate and passthrough disputes.
• International information returns and penalty defenses, including Forms 5471, 8865, 8938, and FBAR.
• Innocent spouse relief under IRC § 6015, including litigation if Appeals resolution is not available or adequate.

When Enforced Collection Threatens Cash Flow or Responsible-Person Exposure

Collection cases benefit from counsel that can stop forced actions and negotiate durable resolutions. Attorneys assess lien and levy exposure, file for CDP hearings where available, and negotiate installment agreements or Offers in Compromise under IRC § 7122 when the facts support doubt as to collectability or effective tax administration. Where payroll trust-fund exposures exist, an attorney defends against the Trust Fund Recovery Penalty under IRC § 6672, including responsible-person and willfulness elements, and coordinates parallel business and individual defenses. Counsel also ensures that collection strategies do not create admissions that complicate audit or criminal exposure.

Common collection matters for which you should retain an IRS attorney

• Final Notice of Intent to Levy or Notice of Federal Tax Lien.
• Complex financial statements, equity analysis, or contested ability-to-pay in OIC or installment negotiations.
• TFRP investigations and interviews of officers, owners, or signatories.
• Appeals of rejected OICs, lien filings, and levies.

If your business claimed the ERC and you now suspect ineligibility—or you’ve received an IRS contact—you should retain counsel immediately. The IRS’s ERC Voluntary Disclosure Program windows closed in 2024, but the ERC Withdrawal Program remains available for specific unpaid or uncashed claims; withdrawals are treated as if the claim was never filed and avoid penalties and interest. Counsel can also defend ERC examinations, evaluate promoter exposure, and unwind filings made by third-party payers. At the Tax Law Offices of David W. Klasing, we have been closely tracking ERC enforcement and disclosure options to determine whether withdrawal, amended filings, or other remedies best protect you.

When joint returns hide a spouse’s misconduct or errors, IRC § 6015 relief may shift or eliminate your joint and severable tax liability. These cases turn on precise facts, deadlines, and detailed narratives—best handled under attorney-client privilege. At the Tax Law Offices of David W. Klasing, our dual-licensed Tax Attorneys and CPAs build the administrative record, pursue Appeals where needed, and litigate if required. We also maintain a dedicated Innocent Spouse library and service pages reflecting our approach and venues for relief.

Automated Under-Reporter (AUR) / CP2000 and Soft-Letter Responses

Seemingly routine AUR mismatches (CP2000) can snowball if handled casually—especially where the “fix” implicates unreported categories (crypto, foreign income, pass-throughs). An IRS attorney controls the record, prepares corrected filings where appropriate, and frames responses to minimize escalation to full exam or penalties.

If your preparer is under investigation or you participated in a marketed tax strategy (micro-captives, etc.), you should not rely on the original promoter or preparer for defense. IRS Office of Promoter Investigations and CI actively pursue promoters and participants; representation is critical to separate your interests, assess remedial filings (including voluntary disclosure where warranted), and prevent admissions that could be used criminally.

Note: The above list is not exhaustive.

If any of the above apply, it would be wise to place the dual-licensed Tax Attorneys and CPAs at the Tax Law Offices of David W. Klasing between you and the government. We assist with high-risk civil matters that may escalate into criminal tax investigations, including unannounced IRS Criminal Investigation contacts, audits indicating fraud, and eggshell or reverse eggshell settings. From day one, we place attorney-client and work product protections around your case and extend privilege to consulting accountants through a Kovel arrangement. Where past conduct was willful, we prepare and submit a truthful, timely, and complete Voluntary Disclosure Practice package. Where conduct was non-willful, we evaluate Streamlined Filing Compliance Procedures and other delinquent submission options for offshore income, FBAR, and FATCA issues, foreign entities and trusts, and digital asset reporting, while reconstructing records and controlling the government’s information flow.

Our dual-licensed tax attorneys and CPAs help with contested examinations and appeals, including Office, Field, and Correspondence audits, protest letters for the Independent Office of Appeals, and United States Tax Court petitions to preserve a prepayment forum within the 90-day deadline. We handle Automated Under Reporter mismatches such as CP2000s, especially where the fix touches cryptocurrency, foreign information returns, or passthrough items. We address preparer or promoter investigations and marketed strategies under scrutiny, including micro captives and similar transactions, and we pursue Innocent Spouse relief under section 6015 when joint filings hide a spouse’s misconduct. For businesses, we advise on Employee Retention Credit withdrawals and audits, unwind erroneous claims, and defend penalties that promoters left behind.

Call the Tax Law Offices of David W. Klasing at 800-681-1295 or contact us online HERE for a reduced-rate initial consultation.