Kevin E. Thorn
The IRS has formed a new Fraud Enforcement Office within its Small Business/Self Employed Division. This new office will be targeting small businesses in New Jersey and nationwide in civil and criminal tax fraud audits and investigations. This article explains what small business owners should do if they are contacted by the Fraud Enforcement Office in relation to allegations of federal tax fraud:
When facing an IRS audit or investigation, it is absolutely imperative to make sound decisions based on the advice of legal counsel. As a result, while you need to address the matter immediately, this does not mean immediately communicating with the Fraud Enforcement Office. You will need to work with your small business’s tax lawyer to understand the risks at hand, and then you will most likely want to have your lawyer deal with the Fraud Enforcement Office’s agents on your company’s behalf.
During an audit or investigation, you cannot make false or misleading statements to the IRS—even if you do not know they are false or misleading. So, rather than simply denying wrongdoing or standing behind your business’s past filings, you need to determine if your business is in compliance with the Internal Revenue Code. If it is not in compliance, this is something you need to know before the Fraud Enforcement Office makes its own determination, and it is something you will need to address proactively in order to avoid unnecessary interest and penalties.
Once you know the scope of your small business’s risk (if any), then you can develop a strategy for handling the audit or investigation. Depending on the circumstances involved, this could include:
The IRS’s new Fraud Enforcement Office is made up of experienced IRS agents, and it works in collaboration with the agency’s other law enforcement divisions. In order to protect your small business (and yourself) during an audit or investigation, you need to rely on the advice and representation of an attorney who has the knowledge and insights required to handle your situation effectively.
While you may not be interested in dealing with the IRS, and while you may want to continue to devote your time and energy to running your small business, you need to give the audit or investigation the attention it demands. If you do not, the consequences could be severe, and the inquiry could end up costing far more than it would have had you addressed it proactively.
Thorn Law Group, which was founded by tax attorney Kevin E. Thorn, is an experienced law firm whose mission is to successfully represent you in sensitive tax controversies. Thorn Law Group assists ...
