You’ll know you’re in trouble with the IRS if you open your door and the person is an agent with the Criminal Investigation Division, or CID. The CID is the police department of the IRS and consists of 2 sections: Special Enforcement and General Enforcement. Special Enforcement investigates organized crime, drugs and unions. Everything else, such as common taxpayers, is the responsibility of the General Execution.
If the CID is at your door, you or someone you know is under criminal investigation. Consultations can take a long time to complete and include interviews with friends, family, neighbors, business partners, bankers, staff, accountants, insurance agents, etc. Don’t try to lie if the CID tells you about someone you know. Be careful as anything you say could lead them to you, especially if they are investigating your business partner. Approximately 80% of tax crimes are prosecuted by the CID.
If you are the subject of the investigation, call your attorney immediately and do not speak to the CID. Your attorney can find out what’s going on by calling the IRS.
The CID will recommend whether or not you should be prosecuted after the investigation. It depends on the merits of the case against you. They must be able to prove that you are guilty beyond a reasonable doubt, so if you have a few things going for you and a good lawyer, you may receive civil penalties instead.
Failure to file a tax return, tax evasion, or filing a fraudulent tax return will earn the CID on your case.
If the CID moves forward with the prosecution, the Department of Justice takes over. Whether the IRS should request a federal grand jury indictment against you will be decided after an Assistant US Attorney General reviews your case. If you are indicted, you will be arrested or ordered to appear before a federal judge. At this point, you will have the opportunity to plead guilty or not guilty. He will have to post bail or may be released on his own recognizance.
The case will go to trial when he pleads not guilty. This can be by a jury or a single judge. You have to be proven by the IRS that you are guilty of the crime beyond a reasonable doubt. You will go to federal prison if convicted of a tax offense. If you end up reaching a plea deal, you will be fined and/or placed on probation, homebound, or sent to a safe house. You may have to bear the costs of the prosecution. Two years is the average for a tax offense.