An IRS investigation is also known as a tax fraud investigation, at least here in the USA. The Internal Revenue Service is the nation’s tax collection department and is responsible for ensuring that every person who must pay tax, of any type, does so in accordance with federal law.
Cheating the IRS is a form of disloyalty to your country and is also an extremely punishable criminal offense. Although the investigators who will track down criminals and make them suffer the wrath of the IRS are not actual private investigators, they are still incredibly talented and skillful at uncovering tax fraud in all its forms and seeking penalties against the perpetrators. The last thing anyone wants to do is anger the IRS.
This essay explores how the IRS finds tax cheats using focused investigation practices.
IRS Investigation Details
The IRS has human and computerized resources, which do nothing except analyze tax returns. The stated incomes, sales tax, property tax and other types of tax are computed against the estimated earnings and due tax debts for every person and business in the country. If discrepancies are thought to exist, the tax professional or computer will red flag the return or tax bill and call for an investigation.
Many investigations are simple matters which actually clear the suspected individual or business once all evidence is in. However, other investigations uncover actual fraud, sometimes on a huge scale. In these circumstances, the tax investigator will seek to prove all counts and then build a criminal case against the perpetrator.
IRS Investigation Facts
IRS investigators may come forward and ask for cooperation with an investigation immediately. However, in some cases, they work secretly and without the subject’s knowledge that they are even being investigated. This is especially true if obvious evidence exists and criminal charges can be filed immediately or if the fraud goes deep into an organization and the detectives need time to ascertain the full extent of the theft.
Regardless, once investigators contact the subject of the query, it is expected that they will cooperate with the investigation or possibly face no mercy if guilt is proven. Penalties for tax evasion include financial fines and jail time, as well as the embarrassment and a lasting criminal record which will never fade.
IRS Investigation Advisory
We have always found it quite strange that the richer a person or company is, the more likely they are to take part in tax evasion. This is statistically proven. The poor have little to gain from not paying their taxes and the rich seem to feel they may be above the burden of taxes. However, the government is watching all, regardless of your opinion on how much you feel is right to pay or not.
Just remember to hire an ethical accountant, since they will keep you honest. Do not cheat the government, since the eventual consequences may be catastrophic to you or your business. Even small cheats over a long time period can add up to be more than you will be able to repay over decades. Do not risk it. Pay Uncle Sam what belongs to him and be happy you have the money with which to pay it.