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IRS Criminal Tax Audits: When Can Taxpayers in Virginia Face Federal Charges?

News, Offshore Account Update

Posted in on March 29, 2024

The Internal Revenue Service (IRS) is ramping up its efforts to prosecute individual and corporate taxpayers for fraud and other crimes. With additional resources at its disposal, the IRS announced several enforcement priorities late last year, and press releases from the IRS’ Criminal Investigation Division (IRS CI) make clear that the agency is targeting taxpayers for a wide range of criminal offenses in 2024. Learn more from Virginia criminal tax attorney Kevin E. Thorn, Managing Partner of Thorn Law Group.  

The IRS’ Criminal Enforcement Priorities in 2024

So far, in 2024 we have seen the IRS target individual and corporate taxpayers for a number of specific tax-related crimes. These include (but are not limited to):  

  • Income Tax Evasion and Fraud – The IRS is targeting individual and corporate taxpayers for all forms of income tax evasion and tax fraud. Failing to file returns, filing false returns, claiming fraudulent deductions and exemptions, and other violations can all lead to criminal charges under the Internal Revenue Code.
  • Abusive Tax Shelters – The IRS is paying particular attention to high-net-worth taxpayers who utilize complex tax planning strategies to minimize their federal tax liability. While there are many legitimate tax planning strategies, those that cross the line can be deemed criminal “abusive tax shelters.”
  • Fraudulent Tax Refunds – The IRS is targeting taxpayers at all income levels who claim fraudulent tax refunds. Fraudulent refunds contribute significantly to the federal tax gap, and the IRS is now using criminal enforcement to deter fraudulent claims.
  • Employment Tax Fraud – Underpaying federal employment taxes, failing to remit employees’ tax withholdings and other employment tax violations can lead to criminal charges as well. In these cases, both the companies and the individuals involved can potentially face prosecution.
  • Cryptocurrency Tax Fraud – Cryptocurrency tax compliance has been an enforcement priority for the IRS for several years, and it remains a priority in 2024. The IRS is issuing subpoenas to exchanges and other intermediaries to identify potential targets for cryptocurrency-related criminal tax audits.
  • PPP, EIDL and ERC Fraud – The IRS is continuing to target Paycheck Protection Program (PPP), Economic Injury Disaster Loan (EIDL) and Employee Retention Credit (ERC) fraud in 2024 as well. Criminal tax audits targeting PPP, EIDL and ERC fraud can lead to a wide range of federal charges.
  • Misleading the IRS – While taxpayers facing IRS criminal tax audits do not need to admit wrongdoing, they cannot intentionally mislead the IRS. Making false or misleading statements to federal agents is a criminal offense under the 18 U.S.C. Section 1001.

While these are some of the most common charges we see flowing from IRS criminal tax audits in 2024, this list is far from exhaustive. Criminal tax audits can present a variety of risks, and understanding the specific risks facing you (or your company) is critical for executing an informed defense strategy.

Schedule a Confidential Initial Consultation with Virginia Criminal Tax Attorney Kevin E. Thorn

If you are facing an IRS audit (or if your company is facing an IRS audit) and you have concerns about facing federal charges, we encourage you to contact us promptly. Call 703-752-3752 or contact us online to schedule an appointment with Virginia criminal tax attorney Kevin E. Thorn, Managing Partner of Thorn Law Group.

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