How To Tell If IRS Is Investigating You

The Internal Revenue Service (IRS) is very serious about resolving tax matters at seemingly every cost. The problem is, they have full authority to conduct criminal investigations, which determine whether you comply with tax laws.

If the government even suspects you of committing wilful tax evasion, you may face an audit, or in the worst-case scenario, a full-on criminal investigation. 

A tax lawyer can help you start addressing these issues legally in a way that won’t hurt your financial state. Unfortunately, many people involve a legal representative when it’s too late and some relief options are no longer available.

This is why it’s helpful to learn how to tell if IRS is investigating you.

Signs That The IRS Might Be Investigating You

Although indications that you’re being investigated are subtle, they are there if you know what you’re looking for. Here are some of the biggest signs that the audit from the IRS has turned into something much more serious:

IRS Agents And Auditors Have Stopped Contacting You

While this may seem like a relief after undergoing an audit, in many cases, it’s actually a bad sign. By now, you’re most likely familiar with how active IRS agents are in pursuing your debts. They’re also very invested in your case and will never shy away from asking for updates or picking up the phone when you call them.

If suddenly they become MIA and no longer return your calls, chances are, your case has been transferred to the Internal Revenue Service’s Criminal Investigation Division. Typically, this happens when the IRS has grounds to believe you’ve committed tax evasion or partook in a variety of tax crimes, such as concealing assets or making false statements.

A similar thing applies to IRS auditors - if they suddenly disappear, the case may no longer be in their jurisdiction. As a rule, Examination and Collection Divisions are required to suspend their activities to avoid jeopardizing a criminal investigation and any possible criminal prosecution. So if the IRS seemingly goes dark on you, it’s time to hire a tax attorney.

Your Bank Records are Being Subpoenaed

Remember what we said about the IRS having almost limitless options? Well, that extends to your bank records. When you receive notice from the bank that the Criminal Investigation Division has summoned your bank reports or the US Attorney's Office has subpoenaed records - it’s not good.

Chances are, the government is gathering potential evidence needed to launch a criminal investigation. You should act quickly and get in touch with a legal professional.

Furthermore, if your accountant was contacted by the IRS or is subpoenaed to the grand jury and is required to bring your tax records, it’s another clear sign that the criminal investigation is actively brewing - meaning that you also need a tax attorney.

Your Previous Tax Returns are Being Audited

Wondering how to tell IRS is investigating you? They inform you that they have selected an older tax return and reveal there are some discrepancies in deductions or reported income. 

While this one is not conclusive by any means, it’s still a sign of concern. To be on the safe side, take care when communicating with your accountant. Accountants are not your legal representatives, and as such, they are not bound by client confidentiality. Everything you say can be used against you in a criminal investigation.

Disproportionate Interest in Specific Transactions

If the agents suddenly want to know more about a specific transaction or start requesting an insane amount of documents, they most likely see certain transactions as suspicious and suspect that there is something sketchy going on. 

This is one of the best signs of how to tell if IRS is investigating you as it indicates a more serious level of scrutiny than with a simple, routine audit. Keep a close eye on what the agents are saying. If the conversation has shifted to determining the intent of the transaction, it means that the IRS is exploring a criminal element in your tax documentation.

Usually, this occurs in the infancy of criminal investigation, so protect your rights and lawyer up right away.

You’re Contacted by The Criminal Investigation Division’s Special Agent

Just like police detectives, IRS special agents may contact you on the phone or show up at your home to try to fish for incriminating information. Even though the special agent may seem forthcoming and put on a friendly face, they’re not trying to help you - you’re under criminal investigation and they’re trying to strengthen their case. 

The best thing to do is to plead the Fifth. Don’t worry if you’ll appear guilty -  you have the right to remain silent for a good reason, and there’s nothing wrong with exercising your constitutional rights. Tell the agent you decline to provide further information without the presence of an attorney and go about your day.

When Is The Right Time To Hire a Tax Attorney?

Now that you know how to tell if IRS is investigating you, it’s the right time to hire an attorney. In fact, you can most likely benefit from involving a legal professional a lot earlier - when you’re informed of an IRS audit. 

You can unwillingly provide incriminating information at the very beginning, which may influence how the rest of the audit proceeds after that. Don’t believe us? Many cases that are referred to the IRS’s criminal branch happen after the initial interview. 

With an attorney at your side, you’ll have someone guiding you through the interview and benefit from the protection of the attorney-client privilege, which doesn’t apply to your accountant. 

Lastly, if you end up being accused of tax evasion or fraud, your freedom could be on the line. At this stage, you can’t avoid hiring an attorney as you’ll need someone to represent you in a court of law.

Attorneys at Law Offices Of Mary E. King Will Help You Protect Your Rights 

You may have the awareness of how to tell if IRS is investigating you, but no amount of online research in the world can stop you from accidentally incriminating yourself when the ball gets rolling. 

Fortunately, you can always rely on the Law Offices of Mary E. King for expert legal assistance in all tax matters. With our wealth of experience in protecting the rights of clients in IRS criminal investigations, we can apply everything we learned over the years to your case and help you come out of it with the best outcome possible. 

Use our contact form or dial 941-906-7585 to schedule a free consultation and we’ll get to work right away on mitigating your tax troubles.

Note: 

The information in this blog post is for reference only and not legal advice. As such, you should not make legal decisions based on the information in this blog post. Moreover, there is no lawyer-client relationship resulting from this blog post, nor should any such relationship be implied. If you need legal counsel, please consult a lawyer licensed to practice in your jurisdiction.