What Does the IRS Criminal Investigation Process Look Like?

So there are two answers to this question. Number one is "What does the IRS criminal investigation process look like from the IRS site?" and number two "What does it look like?" So from the IRS side of things, the criminal investigation process begins with a referral. The IRS doesn't just sit in their office and pick people at random to initiate criminal investigations. What usually happens is a referral will come into the criminal investigative unit either through an audit or through a collections officer or through a whistleblower or through some other third party government investigation. So CI will take that lead and they'll examine the information that's being presented in the referral and then decide whether they want to devote investigative resources to looking at that case or not. If they do decide that they want to devote investigative resources then CI invokes on a fact-finding mission. So CID cases take many years to build in a lot of cases and so what they're doing is they're constantly looking for information. They're trying to develop a case and the goal is when CI puts a case in the hands of a United States attorney, that US attorney has every tool they need in order to secure a conviction. So CI agents take their time. They're very meticulous, they're very careful and it's only after they take great care and caution that they let their investigation be known to the public or to the subject or target of that investigation. The client may or may not be aware that CI is involved. 

The second CI becomes involved and you're aware of it, get a criminal tax attorney involved. A CI investigation can be ongoing for a year or two or even three before the client's really even aware of it. So the client may become aware of it because somebody may call them and say "hey I had this special agent show up at my house to interview me and he asked me a bunch of questions about you" or they may get noticed that CI has looked at their bank records or some comment may have been made or whatever but the point is is the client's experience with the process usually doesn't come until later. Once the client becomes involved in the CI process, then it's about mitigation. There's usually not a lot of contact with the special agents. It's not like they chat openly about their criminal investigations particularly who to the people that they're investigating so there's limited information sharing, there's limited back-and-forth. There may be a U.S. attorney involved. There's usually one supervising the investigation but not always and so you want to make sure that from a client perspective you take a very measured approach to a criminal investigation. As I like to say, it is a marathon and not a sprint so the client needs to prepare himself or herself to make sure that they're doing everything along the process to mitigate their risk appropriately. Criminal investigations are often frustrating to clients. They can take many many months if not years to resolve and there's a lot of time and effort that goes into them but it's very very important. I mean when you're dealing with a criminal investigation the stakes couldn't be any higher because a lot of times clients are looking at really significant felony charges at the end of them so you want to make sure that you do your best. That you guide yourself through the process, that you take it step by step and then you do everything you can to mitigate or dismiss the charges flat out.


Sam Brotman, JD, LLM, MBA

Owner and Director of Legal
Brotman Law