Continuing the interesting remarks of a Montana IRS Criminal Investigations Agent addressing various tax crime issues to a group of civil tax lawyers:
- Attorney advice to a taxpayer is a relevant defense for the taxpayer to raise to a tax crime.
- The IRS has summons or subpoena power to obtain bank records that go more than seven years past, even when banks would normally say that bank records are not available. IRS tax crimes tend to be heavily dependent on financial records, which don’t go away easily.
- The Department of Justice has a 95% conviction rate on tax crimes prosecutions.
- Most of the time, perhaps 99%, Montana criminal tax prosections are handled by the Montana US Attorneys Office and not the Department of Justice attorneys from Washington DC.
- Failure of an employer to remit trust fund payroll taxes to the IRS can be a tax crime. The act of not paying over the payroll trust fund taxes to the IRS could be considered the necessary overt act of the tax crime.
- The IRS CI has made a big push lately for payroll tax criminal investigations. Business owners should be aware that failing to pay trust fund payroll taxes could lead to criminal charges.
- Attorneys should not advise clients that owe payroll taxes to shut down an existing business and start up a new business in order to start fresh on payroll tax compliance. Advising a client in this respect could be a tax crime.
Taxpayers should carefully consider whether wrongful tax action could rise to the level of a tax crime. Taxpayers are encouraged to contact Jared Le Fevre to discuss how to keep tax problems a civil matter and not a criminal matter.
About the Author. Jared M. Le Fevre is a Partner in the Tax, Trusts and Estates Practice Group of Crowley Fleck PLLP. Mr. Le Fevre represents taxpayers before the IRS, IRS Independent Office of Appeals, Tax Court, Federal District Court and state tax agencies throughout Montana, Wyoming, North Dakota, Idaho, and Utah. Mr. Le Fevre is involved in federal, state and local tax audits, appeals, and tax resolution throughout these western states. Mr. Le Fevre also advises clients on the tax effects of business and real estate transactions.