The library
Criminal tax guides
General legal information about how the IRS and the Justice Department handle tax cases that carry criminal exposure. Nothing here is advice on avoiding detection. If you have exposure, get a lawyer before you talk to anyone from the government.
IRS Criminal Investigation
- IRS-CI basicsIRS Criminal Investigation, ExplainedIRS Criminal Investigation is the IRS's law enforcement arm. Learn what special agents do, where cases come from, and how a CI case reaches prosecutors.
- First contactIRS Special Agents at Your Door: What Happens NextTwo IRS special agents show up unannounced. What they want, what they will tell you, and why the right move is a polite refusal and a call to counsel.
- Know your rightsYour Rights in an IRS Criminal InterviewThe Fifth Amendment, the CI rights statement, custodial warnings, recording rules, and copies of your statement. What the IRS manual says.
When an Audit Turns Criminal
- Eggshell auditsThe Eggshell Audit: A Civil Exam With Criminal Exposure UnderneathAn eggshell audit is a civil IRS exam of a taxpayer with hidden criminal exposure. Why it is dangerous, what examiners watch for, and who to call.
- Fraud referralsWhen an Audit Turns Criminal: Inside the IRS Fraud ReferralHow a civil IRS audit becomes a criminal case: fraud development status, Form 11661, Form 2797, the 10-day conference, and what CI decides.
- Inside the IRSThe Fraud Enforcement Advisor: The Person You Never MeetFraud Enforcement Advisors guide IRS examiners and revenue officers on fraud cases. What an FEA does and why FEA involvement in your audit matters.
Civil Fraud and Badges of Fraud
- Badges of fraudBadges of Fraud: The IRS Checklist, ExplainedThe IRS manual lists the badges of fraud examiners look for in income, deductions, records, and conduct. What they mean and why they are not proof alone.
- IRC 6663The Civil Fraud Penalty: 75 Percent, and the IRS Has to Prove ItIRC 6663 adds 75 percent of the underpayment due to fraud. Who carries the burden, how the penalty is approved, and how it ties to criminal cases.
- Two tracksCivil vs. Criminal Tax Fraud: Same Facts, Different CasesCivil and criminal tax fraud use the same facts but different burdens, goals, and outcomes. Here is how the IRS and the Justice Department draw the line.
The Criminal Tax Statutes
- Time limitsThe Criminal Tax Statute of Limitations Under IRC 6531Most criminal tax charges must be filed within 6 years under IRC 6531. Which offenses get 3 years, which get 6, and what stops the clock.
- IRC 7201Tax Evasion Under Section 7201: What the Government Must ProveTax evasion under IRC 7201 is a felony with up to 5 years in prison. The three elements, evasion of assessment vs. payment, and related consequences.
- Spies v. United StatesAffirmative Acts: The Line Between a Misdemeanor and a FelonyEvasion needs an affirmative act, not just failing to file and pay. What Spies v. United States held and how the IRS identifies affirmative acts today.
- IRC 7202Section 7202: When Unpaid Payroll Taxes Become a FelonyNot paying over withheld payroll taxes can be a felony under IRC 7202. The elements, how it differs from the trust fund penalty, and pyramiding.
- IRC 7203Section 7203: The Four Duties Behind the Tax MisdemeanorSection 7203 makes willful failure to file, pay, keep records, or supply information a federal misdemeanor. The four duties, the penalties, and the limits.
- IRC 7206(1)Section 7206(1): The Perjury Statute of the Tax CodeIRC 7206(1) makes it a felony to willfully sign a false return under penalties of perjury. The elements, why no tax loss is required, and penalties.
- IRC 7206(2)Section 7206(2): When Helping With a Return Becomes a CrimeIRC 7206(2) reaches preparers, advisors, and others who willfully help prepare false returns, even if the taxpayer did not know. Elements and exposure.
- IRC 7212(a)Obstruction Under Section 7212(a): The Omnibus Clause After MarinelloIRC 7212(a) makes corrupt obstruction of tax administration a felony. What the omnibus clause covers after Marinello v. United States (2018).
- Cheek v. United StatesWillfulness: The Word That Decides Criminal Tax CasesEvery major tax crime requires willfulness, a voluntary, intentional violation of a known legal duty. What Cheek v. United States held and why it matters.
Voluntary Disclosure
- Voluntary disclosureThe IRS Criminal Investigation Voluntary Disclosure PracticeHow the IRS-CI Voluntary Disclosure Practice works under IRM 9.5.11.9 (rev. Nov. 19, 2025): who qualifies, timeliness, Form 14457, and penalties.
- Form 14457Form 14457, Step by Step: How a Voluntary Disclosure Moves Through the IRSHow Form 14457 works: Part I preclearance, the 45-day Part II deadline, the narrative signed under penalties of perjury, and what happens after.
- TimelinessVoluntary Disclosure Timeliness: The Door Closes Without WarningA voluntary disclosure must reach IRS-CI before an exam, third-party tip, or enforcement action. How IRM 9.5.11.9 defines timeliness and why delay costs.
- VDP penaltiesWhat a Voluntary Disclosure Costs: The Penalty FrameworkWhat a voluntary disclosure costs: the single fraud penalty under IRM 4.63.3.18.2, the six-year period, FBAR treatment, and the December 2025 proposal.
- Quiet disclosureQuiet Disclosure: Why Fixing It Quietly Is Not the Same as Coming ForwardFiling amended returns without going through IRS-CI is often called a quiet disclosure. Why it is not a voluntary disclosure and when amending is right.
Investigation and Prosecution Process
- Methods of proofNet Worth, Bank Deposits, and Spending: How the IRS Proves Hidden IncomeWhen books are unreliable, IRS-CI proves income with net worth, expenditures, and bank deposits analysis. How each method works and the Holland safeguards.
- PrivilegeKovel Arrangements: Keeping Your Accountant Inside the PrivilegeWhy your CPA's privilege disappears in a criminal tax matter, what United States v. Kovel held, and how accountants work under a lawyer's privilege.
- DOJ reviewFrom Special Agent to Prosecutor: How DOJ Reviews a Criminal Tax CaseAfter IRS-CI recommends prosecution, Justice Department lawyers review the case. Special agent reports, complex cases, conferences, and who decides.
- Grand juryGrand Jury Subpoenas in Tax Investigations: Target, Subject, or WitnessA grand jury subpoena in a tax case means prosecutors are involved. Targets vs. subjects, the advice of rights, secrecy, and testifying before a grand jury.
- Search warrantsWhen IRS Criminal Investigation Executes a Search WarrantHow IRS Criminal Investigation gets and executes search warrants in tax cases: approvals, the least intrusive means rule, consent, inventories, and counsel.
- RestitutionRestitution After a Tax Conviction: When the Sentence Becomes a Tax BillCriminal tax restitution can be assessed and collected like tax under IRC 6201(a)(4). How it is ordered, why its form matters, and what it does not settle.
- Pleas and sentencingPlea Agreements and Sentencing in Criminal Tax CasesHow the Justice Department handles pleas and sentencing in tax cases: the major count policy, no felony to misdemeanor pleas, tax loss, and probation.
Before you talk to an agent
Exposure is a legal problem. Treat it like one.
If you think a tax problem could carry criminal exposure, talk to a lawyer before you talk to the IRS. Conversations with your lawyer are privileged. Conversations with an agent are evidence.