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Ultimate Guide to Maryland Tax Law Audits & Criminal Tax Law

Did you receive an audit letter from the IRS? Have you been contacted by Special Agents from the IRS Criminal Investigation Division? If so, it is important that you speak with a Maryland tax audit lawyer as soon as possible. For a confidential consultation, call (844) 796-8565 now.

The IRS audits individual and corporate taxpayers for a variety of reasons, and the IRS Criminal Investigation Division targets taxpayers for a broad range of statutory offenses. If you have received an audit letter or been contacted by Special Agents, determining why you are being targeted is the first step toward executing a strategic defense. Figuring out why you have the IRS’s attention is one of the first reasons to hire a Maryland tax audit lawyer to assist you.

However, it is far from the only reason. Although IRS tax audits are common, they can lead to substantial tax liability, interests and penalties. If you are facing a criminal tax law investigation, prison time could also be on the table. The Internal Revenue Code, the Bank Secrecy Act and the Foreign Account Tax Compliance Act (FATCA) are extraordinarily complicated, and they are also just three of numerous laws that the IRS Criminal Investigation Division uses to target taxpayers. In order to protect yourself to the greatest extent possible, you need an experienced attorney representing you every step of the way.

What else do you need to know if you are facing an IRS audit or investigation? What else do you need to do, and what can an attorney do for you? Below is an overview of what you need to know.

There are Different Types of IRS Audits and Criminal Tax Law Investigations

First, there are different types of IRS audits and criminal tax law investigations. When facing an audit or investigation, understanding the type of inquiry you are facing is critical to building an effective defense strategy appropriately.

Types of IRS Audits

The IRS conducts three types of tax audits. The IRS uses each type of audit to gather information from both individual and corporate taxpayers, and audits can focus on alleged deficiencies ranging from failure to pay ordinary income tax to failing to report offshore holdings:

  • Correspondence Audits – Correspondence audits are conducted by mail and are generally the least-severe type of audit.
  • Office Audits – Office audits require in-person meetings at the IRS offices in Maryland and typically involve issues that cannot be resolved via mail.
  • Field Audits – During a field audit, IRS agents will come to your home or business to ask you questions and review your financial records.

“Strategic Priorities” for Criminal Tax Law Investigations

With regard to criminal investigations, the IRS Criminal Investigation Division focuses on four “strategic priorities”:

  • Legal Source Tax Crimes – Tax crimes that involve underreporting and underpaying tax on income derived from legitimate sources.
  • Illegal Source Financial Crimes – Tax and other financial crimes that involve income derived from illegitimate sources (other than narcotics trafficking and terrorism, as discussed below).
  • Narcotics-Related Financial Crimes – Tax and other financial crimes related to trafficking in illegal narcotics in violation of the federal Controlled Substances Act.
  • Counterterrorism Financing – Financial crimes and other illegal activities related to the funding of terrorism in the United States and abroad.

The Penalties for Tax Fraud and Other Related Offenses Can Be Severe

Regardless of whether you are facing an IRS audit or criminal tax law investigation in Maryland, the consequences can be severe. Hiring an experienced federal tax lawyer is the best way to mitigate your risk of facing penalties including:

  • Interest and percentage-based penalties (for IRS audits)
  • Criminal fines
  • Federal imprisonment

In many cases, the IRS Criminal Investigation Division (often working in conjunction with the Federal Bureau of Investigation (FBI), U.S. Department of Justice (DOJ) and other agencies) will pursue charges for non-tax-specific crimes as well. As a result, in addition to facing fines and prison time for various forms of tax fraud, taxpayers targeted in criminal investigations may face additional penalties based on allegations of:

  • Conspiracy
  • Mail fraud
  • Money laundering
  • Racketeer Influenced and Corrupt Organizations Act (RICO) violations
  • Bank, insurance, health care or securities fraud
  • Wire fraud

There are Several Potential Defense Strategies in IRS Audits and Criminal Tax Law Investigations

How can you avoid these penalties? The defenses you have available will depend on the unique facts of your particular case. The nature of the allegations against you, the scope of the alleged violations, the existence of any evidence of intent and various other factors will all play a role in determining what defenses you can use. With this in mind, examples of potential defense strategies in federal tax audits and investigations include:

  • Proving Federal Tax Law Compliance – If you have documentation to support and substantiate your federal tax returns, then proving your compliance should provide a complete defense. Contact US International Tax Advisors for immediate assistance with your tax matter.
  • Arguing Lack of Intent – If you accidentally made a filing mistake, showing that you did not do so intentionally could help you stave off criminal prosecution and avoid enhanced penalties.
  • Pursuing an Offer in Compromise – Under the right circumstances, pursuing an offer in compromise can mitigate your overall liability while also keeping you out of federal prison.
  • Seeking a Deferred Prosecution Agreement – Seeking a deferred prosecution agreement can be the right choice in some cases; however, as this involves admitting to criminal wrongdoing, it is not a decision to be taken lightly.
  • Asserting Statutory or Constitutional Protections – From innocent spouse relief to the Fourth Amendment protection against unreasonable searches and seizures, if you are facing an IRS audit or investigation, your tax lawyer should be able to help you identify all of the statutory and constitutional defenses you have available.

Schedule a Confidential Initial Consultation with a Maryland Tax Audit Lawyer

For more information about defending yourself or your company during an IRS audit or a criminal tax law investigation, please contact us to schedule a confidential initial consultation. To speak with a Maryland tax audit lawyer at US International Tax Advisors as soon as possible, call (844) 796-8565 or send us your contact information online now.


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