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IRS Criminal Investigation Supportfor Tax Attorneys and CPAs
When a matter moves from a civil tax issue to IRS Criminal Investigation, the defense needs people who have built those cases from the inside. Sage Investigations consults with tax attorneys and provides litigation support on federal matters involving income tax investigations, money laundering (18 USC 1956 and 1957), Form 8300 violations (26 USC 6050I), structuring (31 USC 5324), and Paycheck Protection Program (PPP) investigations.
For CPAs
Why CPAs refer these matters
CPAs handle write-ups, tax preparation, audits, consulting, and business valuation — not criminal tax defense. If a CPA advises a client through an IRS criminal case, the CPA can be compelled as a government witness against that same client. Referring the matter to Sage, who then works with the client's attorney, helps the CPA avoid that conflict while the client gets specialists in IRS criminal procedure. The CPA firm retains the client; Sage is engaged through the end of the matter. Analysis and reports are covered by the attorney work product rule when we are retained by counsel.
The defense
How we help the defense
We will:
- Assist in defending clients before the IRS and in federal court
- Help foresee potential criminal problems
- Follow the source and disposition of cash and bank funds
- Identify mitigating factors
- Acquire, scan, and store records in the government's possession for meetings with the IRS or for trial
- Reconcile returns to records
- Preserve evidence as paper, scanned documents, computer-forensics data, and electronic files
- In Form 8300 matters, determine false information on the form, and provide proactive training to avoid Form 8300 pitfalls
- In structuring matters, determine the source of the funds and why the structuring took place, and reconcile tax returns (known income) with business or personal records
- Trace PPP funds in connection with SBA loan authorization
- Provide expert testimony and assist the defense attorney with cross-examination of the government's summary witness, and testify as the defense's summary or expert witness if needed
DIO is used to reconcile returns to records and to produce evidence-based reports. We also consult at the state level on white-collar theft, including embezzlement and construction fraud, and we understand what it takes to help defend a client against Medicare fraud allegations.
Results
Representative results
IRS declined to recommend prosecution
The home and office of husband-and-wife business owners were raided by IRS-CI based on allegations by a disgruntled employee. The search warrant netted hundreds of boxes of records, and the investigation lasted four years. Sage was hired by the attorneys, reconstructed income, reconciled returns to books and records, and organized the meaningful seized records. After Sage rendered its findings, and after two further years of waiting, IRS declined to recommend prosecution.
Structuring and conspiracy charges dismissed
Bar owners in Texas were charged with structuring and conspiracy after one owner deposited just under $10,000 to a company account daily over a period of months. Sage reviewed the accounting records down to the cash-register tapes, found that combined revenue for the nights charged was just under $10,000 each day, and, with the attorney, concluded there was no evidence of an overt act of conspiracy. The attorney explained the findings to the judge, and the judge dismissed all charges.
What attorneys say
I have been working with Ed Martin for over two years in a criminal income tax case which involved complex financial matters. During that time, I found Mr. Martin to understand the financial records in a way that I was unable to. He was very meticulous in his reports to me and was an incredible asset to the firm.
Why would a CPA refer an IRS criminal case to Sage?
Advising a client through a criminal matter can force a CPA into becoming a government witness against that client. Referring the case to Sage, working with the client's attorney, removes that conflict.
What kinds of IRS criminal matters do you handle?
Income tax crimes, money laundering, Form 8300 violations, and structuring, along with related white-collar, theft, and fraud matters at the state level.
Will the CPA lose the client?
Your firm will always retain your client. Sage is only engaged to the end of the matter.
How do you charge?
Rates vary by the type of case. We require a retainer and bill hourly against it. Call 512-659-3179 to discuss the matter.
