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How to Respond to an IRS Criminal Investigation

By Los Angeles Criminal Defense Attorney on April 10, 2025

When the Internal Revenue Service (IRS) comes knocking, it’s natural to feel nervous. But if you’ve received notice of a potential IRS criminal investigation, the stakes are far higher than a typical audit. The federal government may suspect that you’ve committed tax fraud, evasion, or another financial crime—and they’re assembling a case to prove it.

If you’re facing this level of scrutiny, understanding how to respond and when to invoke your rights is critical. Every decision you make counts because a misstep can lead to charges, asset seizure, or even federal prison.

What Triggers an IRS Criminal Investigation?

The IRS doesn’t open criminal cases lightly. These investigations are typically reserved for suspected violations that go beyond simple errors.

Often, a criminal investigation follows a civil audit, but the transition is not always obvious to the taxpayer. One of the telltale signs is the involvement of the IRS Criminal Investigation Division (CID), whose agents are federal law enforcement officers.

Triggers include:

• False tax returns
• Unreported income
• Offshore accounts
• Failure to file returns
• Structuring financial transactions to avoid reporting
• Payroll tax violations by business owners

Understand the IRS Criminal Investigation Process

It’s important to note that CID agents are not required to warn you that you’re under investigation when they make contact. Their goal is to collect evidence, often by getting you to talk voluntarily—without a lawyer present.

Here’s how a typical IRS criminal case unfolds:

1. Preliminary analysis: CID receives a tip or identifies a suspicious return and begins reviewing public records, tax filings, and financial data.
2. Subject investigation: CID agents dig deeper—possibly using surveillance, informants, and subpoenas.
3. Prosecution recommendation: If evidence supports criminal charges, the case is referred to the Department of Justice (DOJ) for prosecution.
4. Prosecution & trial: The DOJ may assemble a grand jury to seek indictment and move forward with federal charges.

What to Do If Contacted by an IRS Agent

If you are approached by a CID agent—whether by phone, in person, or through a letter—do not speak to them without legal representation.

Many individuals mistakenly assume they can “clear things up” by answering questions. In reality, even seemingly innocent answers can be used against you later. Your response should be brief and clear: “I will not speak with you without legal representation.”

You need to retain an experienced federal tax audit defense attorney or white-collar defense lawyer immediately—preferably one who has handled criminal IRS matters before.

Protecting Your Rights During an Investigation

When you’re under federal investigation, your rights include the following:

• The right to remain silent
• The right to an attorney
• Protection against self-incrimination
• Protection against unlawful searches and seizures

But here’s the reality: if you don’t assert these rights, you risk waiving them.

Silence and legal counsel are your best defenses. Do not produce documents, give interviews, or explain transactions without the guidance of a qualified lawyer. Even voluntary cooperation can be twisted into “admissions” or perceived intent.

The Role of Legal Representation in IRS Investigations

Legal representation is not just a protective layer—it’s your strategic defense. At Werksman Jackson & Quinn LLP, our Los Angeles white-collar criminal defense attorneys are former prosecutors with years of experience navigating IRS procedures, criminal tax cases, and financial investigations. We understand how the IRS builds cases and, more importantly, how to dismantle them.

We offer the following legal services in these cases:

• Analyzing the scope of the government’s case
• Preventing escalation from civil to criminal charges where possible
• Responding strategically to subpoenas, summonses, and interview requests
• Negotiating with the IRS or DOJ before charges are filed
• Framing a vigorous defense in federal court if needed

Civil vs. Criminal: Understanding the Difference

The IRS’s civil arm handles most tax matters, including fines, back taxes, and interest. Criminal investigations, on the other hand, are entirely different.

In a civil audit, you may be asked to justify deductions or prove income. In a criminal case, however, you are the subject of an investigation for alleged intentional wrongdoing. Penalties may include:

• Felony charges
• Years in prison
• Massive financial penalties
• Asset forfeiture
• Loss of professional licenses

Signs You May Be Under Criminal Investigation

Here are some red flags you’ll want to watch out for:

• An agent introduces themselves as being from the CID
• You receive a target letter from the U.S. Attorney’s Office
• A search warrant is executed at your home or business
• Former employees or associates mention being questioned
• You are served with a grand jury subpoena

If any of these occur, do not wait to see how things unfold. Time is of the essence. Contact a seasoned attorney immediately.

Why Choose Werksman Jackson & Quinn LLP

Facing the IRS alone is a mistake you can’t afford to make. When the federal government brings its full force to bear, you’ll need the strength of a qualified legal team to back you up.

With decades of success in complex white-collar cases, Werksman Jackson & Quinn LLP is the firm you’ll want to have by your side when your freedom and reputation are at stake. With our law firm, you aren’t just hiring a lawyer. We fight back with precision and power.

Contact a Los Angeles IRS Criminal Investigation Defense Lawyer Today

If you’ve been contacted by IRS agents or you believe you’re under criminal investigation, the decisions you make in the first few days will shape the rest of your case. Seeking prompt legal guidance is your best protection.

Call Werksman Jackson & Quinn LLP immediately at (213) 688-0460 for a free consultation to learn more about our white-collar criminal defense services and how we can help you.