What Should I Do If I Suspect My Tax Preparer Is Being Investigated by the IRS?

Anybody that you think might be a subject or a target of an IRS Criminal Investigation - you're going to want to think that about cutting off contact with them sooner rather than later. If somebody is under the microscope of IRS CI, you don't want to be anywhere near that person. You don't want to touch them with a ten-foot pole. The fact of the matter is that a lot of tax preparers get investigated by CI because they present a huge problem for a CI. Think about it this way - if you're an individual and you cheat on your taxes the loss is really mitigated to your individual return. Not saying that's a good thing but from the government's perspective, when the government looks at tax cases one of the factors they consider is tax loss so the tax loss with an individual may not be as great, but when you're dealing with a preparer the tax loss associated can be greatly amplified across all the preparers' clients. So if you're one of those clients and there could be errors on your return, whether you know about them or not you're going to want to seek to mitigate your own risk. Most often in tax preparer cases you will face some sort of a civil audit and so it's important to be prepared going into it that you're not just dealing with civil liability. You're not just dealing with penalties and interest at this point, you're dealing with potential criminal liability and if you don't think that your tax preparer is going to throw you under the bus in this context in order to save themselves, then you're kidding yourself. The best thing that you can do is consult with a tax attorney. Depending on the circumstances you may not need to get tax counsel involved right away. You may just need a little bit of a consultation and to wait to see and assess the situation, but it's important that you understand what your risks are, what your rights are and have a clear path going forward on how you should handle things. At the very least, having a consult with a tax attorney and understanding what your rights are and what your obligations are will help you lead the road in the future and that's the best thing that you can do. It's understanding your risk, it's mitigating your risk and then helping yourself going forward to keep yourself out of trouble and away from the agent.

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Sam Brotman, JD, LLM, MBA

Owner and Director of Legal
Brotman Law

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