Should You Make a Voluntary Disclosure if You Think Your Tax Advisor May Be Under Criminal Investigation?

It’s common practice for an individual or a corporation to use a third-party tax professional to help them with their tax filings. However, if you are suspicious that your tax advisor may be the subject of a criminal tax investigation you need to take the proper precautions to make sure that you are protected. That may include making a voluntary disclosure of any suspected impropriety in your tax filings that were prepared by the individual under investigation to the IRS.

The decision to voluntarily disclose tax information to the IRS is complex and requires an honest evaluation of your individual facts and circumstances. Your first step should be to contact a competent dually licensed Criminal Tax Defense Attorney & CPA. It is critical to obtain the help of a licensed attorney who can take you through the process of voluntary disclosure. Successfully entering the voluntary disclosure program is the most significant step to ensuring a pass on criminal tax prosecution when faced with potential criminal tax issues.

The Tax Law Offices of David W. Klasing will work hard to ensure that you are protected from the criminal tax exposure that using a tax advisor under criminal tax investigation might cause. Call our offices at (800) 681-1295 to set up a consultation.

IRS Announces Creation of Program to Target Criminal Tax Shelter Advisors & Promoters

On April 19, the IRS released the news of the establishment of the Office of Promoter Investigations (OPI). The OPI’s chief mandate is the development of strategy, programs and policy for the agency regarding abusive tax schemes and transaction matters. The dedication of a new department suggests the IRS’s commitment to chasing down bad-faith tax preparers.

The OPI will be headed up by Lois Deitrich, an agent with 20 years of experience at the IRS. Officials at the IRS expect the OPI to work in tandem with other departments across the agency to allow the IRS to increase overall capacity when investigating suspicious parties.

What is Voluntary Disclosure?

A Voluntary Disclosure is an IRS Program through which a taxpayer gains the most favorable standing with the IRS in the instance of past willful tax reporting improprieties. To put it simply, voluntary disclosure is an individual’s best chance to avoid criminal prosecution for a tax matter. The taxpayer will voluntarily provide the IRS with truthful and complete information and must cooperate with the IRS fully as the agency determines the taxpayer’s actual tax liability. The IRS Criminal Investigations Office (IRS-CI) has often looked favorably upon taxpayers who come forward, engage in complete disclosure, and agree to pay an oft-reduced penalty, because it lightens their load and makes their lives just a bit easier and enhances voluntary compliance.

Voluntary disclosure is a Criminal Tax Attorney’s key tool in ensuring that you do not end up behind bars for what you may view as a series of simple mistakes. However, no taxpayer should attempt to undertake voluntary disclosure without the guidance of an Experienced Criminal Tax Defense Attorney. To speak to the Tax Lawyers and CPAs at the Tax Law Offices of David W. Klasing today, call our California offices at (800) 681-1295.

Note: As long as a taxpayer that has willfully committed tax crimes (potentially including non-filed foreign information returns coupled with affirmative evasion of U.S. income tax on offshore income) self-reports the tax fraud (including a pattern of non-filed returns) through a domestic or offshore voluntary disclosurebefore the IRS has started an audit or criminal tax investigation / prosecution, the taxpayer can ordinarily be successfully brought back into tax compliance and receive a nearly guaranteed pass on criminal tax prosecution and simultaneously often receive a break on the civil penalties that would otherwise apply. 

It is imperative that you hire an experienced and reputable criminal tax defense attorney to take you through the voluntary disclosure process. Only an Attorney has the Attorney Client Privilege and Work Product Privileges that will prevent the very professional that you hire from being potentially being forced to become a witness against you, especially where they prepared the returns that need to be amended, in a subsequent criminal tax audit, investigation or prosecution.

Moreover, only an Attorney can enter you into a voluntary disclosure without engaging in the unauthorized practice of law (a crime in itself). Only an Attorney trained in Criminal Tax Defense fully understands the risks and rewards involved in voluntary disclosures and how to protect you if you do not qualify for a voluntary disclosure.

As uniquely qualified and extensively experienced Criminal Tax Defense Tax Attorneys, KovelCPAs and EAs, our firm provides a one stop shop to efficiently achieve the optimal and predictable results that simultaneously protect your liberty and your net worth. See our Testimonials to see what our clients have to say about us!

When Can You Make a Voluntary Disclosure?

For your voluntary disclosure to hold weight with the IRS, it is important that it is initiated in a timely manner. A taxpayer’s voluntary disclosure about potential criminal tax liability must come prior to:

• The IRS notifying the taxpayer that they have commenced a criminal investigation into the taxpayer.
• The IRS receiving a tip about the taxpayer’s noncompliance.
• The IRS acquiring information about the liability through criminal enforcement action, such as a search warrant.
• An audit being opened against the taxpayer.

In these instances, it is usually better to act sooner rather than later. However, if you are under the impression that your voluntary disclosure may no longer be timely, the matter becomes much more complicated. Further, if you intend to disclose certain improprieties such as illegal source income, you should be aware that there are circumstances where voluntary disclosure is ineffective.

Voluntary disclosure should be timely, but the decision to engage in the process requires careful legal consideration. To properly navigate through a voluntary disclosure, it is crucial to have the assistance of competent legal professionals and tax experts. To speak to an experienced California Tax Attorney and CPA today, call the Tax Law Offices of David W. Klasing at (800) 681-1295.

Noisy vs. Quiet Disclosures

If you have decided to voluntarily disclose with the IRS, you might be tempted to put some thought into whether you want your disclosure to be noisy or quiet. A traditional “noisy” voluntary disclosure happens when the voluntary disclosure package is delivered to the Internal Revenue Service’s Criminal Investigation Office (IRS-CI) after first receiving assurances that the taxpayer at issues qualifies for the program BEFORE providing incriminating evidence to the IRS. Conversely, a “quiet” disclosure involves filing amended returns that can cover several calendar tax years via the service center were the taxpayer originally filed. This office generally discourages quiet disclosures rather than loud disclosure as the amended returns can easily be viewed by the IRS as a criminal admission. The decision of how to disclose should absolutely be informed by the counsel of experienced Criminal Tax Defense Attorneys and CPAs. Contact the Tax Law Offices of David W. Klasing at (800) 681-1295.

Will You Be Audited if Your Tax Advisor is Under Criminal Investigation?

If you receive a notification from the IRS that your tax advisor or preparer is being criminally investigated, this is a sign that you will most likely be the subject of an eggshell audit or criminal tax investigation yourself. Regardless of the conduct of the tax preparer that you enlisted, your name is on your tax returns, and you can and will at a minimum be held responsible for any unpaid taxes owed to the IRS plus penalties and interest, at a maximum you can be found to have participated in a criminal tax conspiracy with your preparer to engage in tax fraud.

Get Help with Your Case Today

The tax professionals at the Tax Law Offices of David W. Klasing have decades of experience battling the IRS on behalf of clients just like you. If you believe that your tax advisor or preparer may soon become or already is the subject of a criminal tax investigation, you should contact our office. Call our offices at (800) 681-1295 to schedule a consultation with one of our experienced dually licensed Tax Attorneys & CPAs.

Questions and Answers for Criminal Tax Representation

• When tax defense counsel parallels tax crime investigation
• Guilty of tax obstruction by backdating documents?
• To be found guilty of tax obstruction must a person actually be successful in impeding the IRS’s functions?
• Help! The Document I Gave the IRS Had False Information
• Tax crime aiding or assisting false return IRC §7206(2)
• What is the crime known as tax obstruction § 7212?
• What is the difference between tax perjury and tax evasion?
• What is the tax crime commonly known as tax perjury?
• What is a Klein Conspiracy?
• Increased possibility of civil action in IRS investigation
• Am I Guilty of Tax Evasion if the Law is Vague?
• What happens if the IRS thinks I committed tax crimes?
• What are ways to defend against a tax evasion charge?
• Difference between criminal tax evasion and civil tax fraud
• What accounting method does the IRS use for tax fraud
• Can I Change Accounting Method to the Accrual Method
• What is the willfulness requirement for tax evasion?
• I didn’t know I committed tax fraud. Can I get off?
• Concealed assets from IRS. Can I avoid tax evasion charges
• How government proves I willfully engaged in tax evasion
• What is the venue or court where a tax crime case is heard?
• Must the IRS prove tax crimes beyond a reasonable doubt?
• Is it a crime to make false statements to the IRS?
• Will the IRS overlook my tax evasion if it’s minor?
• Failed to tell IRS about my nominee account
• Audit risk with cash based business transactions
• How to defend a client charged with tax evasion
• Is it tax evasion if I didn’t file income tax return?
• Government says I attempted to evade my taxes. Now what?
• I forgot to pay my taxes or estimated tax. Is this a crime?
• Government proof I “willfully” failed to pay taxes
• 5 Ways to Respond to Tax Evasion Charges
• Being audited after using a tax professional
• Rules for what an IRS agent can do while investigating me
• How tax preparers, attorneys and accountants are punished
• How the IRS selects tax crime lead for investigation
• How does the IRS prosecute suspected tax crimes?
• Does IRS reward informant leads for suspected tax crimes?
• How the government proves deficiency in a tax evasion case
• Do prior tax crimes factor into new IRS tax convictions?
• Requesting conference before investigative report is done
• Requesting conference after IRS Special Agent Report
• What are my rights during an IRS criminal investigation?
• Avoid prosecution for tax crime with voluntary disclosure?
• Defense tactics that make it hard for to prove willfulness
• How a tax attorney can stop your criminal tax case?
• What can you generally tell me about tax crimes?
• Continuing filing requirement with investigation pending
• Federal criminal code crimes that apply to tax issues
• Penalty for making, subscribing, and filing a false return
• CID special agent’s report for criminal prosecution
• What is the discovery process in a criminal tax case?
• What the IRS includes in indictment for tax case
• What is the hardest element of a tax crime to prove?
• IRS methods of gathering evidence to prove tax crime
• What does a grand jury do in IRS tax crime prosecution?
• Failure to keep records or supply information
• Failure to make a return, supply information, or pay tax
• What is attempting to evade payment of taxes?
• What is income tax evasion and how is it punished?
• What is attempted income tax evasion?
• What is the crime of failure to pay tax? What is punishment
• Crime of making or subscribing false return or document
• Criminal Investigation Division investigation tactics
• Tax crimes related to employment tax forms and trust funds
• Tactics to defend or mitigate IRS criminal tax charges
• How the IRS generates leads about suspected tax crimes
• What is the crime ”evasion of assessment” of tax?
• Specific examples of “attempting” to evade tax assessment
• What is the so-called Spies evasion doctrine?
• Does overstating deductions constitute tax evasion?
• Is it tax evasion if my W-4 contains false statements?
• IRC §7201 attempt to evade vs. common-law crime of attempt
• What are the penalties for Spies tax evasion?
• How government proves a taxpayer attempted tax fraud
• What is a tax that was “due and owing.”
• What is evasion of assessment for tax liability?
• Is evasion of assessment different from evasion of payment
• Does the IRS have a dollar threshold for tax fraud?
• What is the IRS burden of proof for tax fraud convictions?
• Are Tax Laws Constitutional?
• What is the source of law that defines tax evasion?
• Does section 7201 create two distinct criminal offenses?
• Does tax evasion definition include partnership LLC
• What if I helped someone else evade taxes?
• Is it illegal to overstate deductions on my tax return?
• Is it illegal to conceal bank accounts from the IRS?
• Do later losses justify prior deductions?
• Common reasons the IRS and DOJ start investigations
• What is the Mens Rea component of tax crimes?
• What is a proffer agreement and what are the risks?
• Why to have an attorney to review a proffer agreement
• Why enter into a proffer agreement?
• Limited use immunity from proffer agreements
• Difference between civil and criminal fraud allegations