An egg shell audit is a civil audit in which the return(s) under examination contain a material understatement of income, material overstatement of deductions or credits were claimed that the taxpayer was not entitled to, the end result of which was that the taxpayer showed less tax liability than they would have owed had a true, complete and accurate return been filed. These errors can be caused by mere negligence, which may result in a 20% negligence penalty on any additional income tax found to be owed under audit, or via willful intent which would indicate underlying criminal issues with the tax filings under audit, which may result in 3 to 5 years in jail and or a 75% fraud penalty.

November 30, 2015

What is an eggshell audit?

An egg shell audit is a civil audit in which the return(s) under examination contain a material understatement of income, material overstatement of deductions or credits […]
November 6, 2015

How should Tax Audits be Handled by Criminal Tax Counsel?

When an underlying issue(s) in a single or set of tax or information reporting returns exists that is caused by yet undiscovered taxpayer’s potentially criminal noncompliance, […]
April 1, 2014

What are the possible outcomes of an egg shell audit?

There are generally three possible outcomes for egg shell audit; 1. The Revenue Agent does not consider the misstatements found and adjustments made during the audit […]
April 1, 2014

Effective tax defense counsels goals in an egg shell audit?

In the typical eggshell audit criminal tax defense counsel seeks to avert the emergence of a criminal investigation, by attempting to prevent a client from making […]
April 1, 2014

Why is a reverse egg shell audit dangerous for a taxpayer?

Because of recent changes in IRS internal policy, parallel investigations are on the rise and are rapidly becoming a favorite tool of the IRS. The advantages […]
April 1, 2014

What is a reverse egg shell audit?

Reverse egg shell audits are parallel and simultaneous civil and criminal investigations where essentially a criminal tax investigation is disguised as a civil audit. Reverse eggshell […]