Criminal tax investigations can begin in a number of ways.  A large portion of these cases come from information sent to the Criminal Investigation Division by other departments of the IRS.  The most frequent of these referrals comes from the Examination Division, which conducts the more frequent and more well-known civil tax audits.  These tax examiners have the most frequent contact with taxpayers, who sometimes find facts that may suggest the presence of fraud.  These tax examiners are instructed to look for evidence of fraud whenever they audit income, estate or gift tax returns.

Other ways that a criminal tax investigation may be initiated include:

• Tips from informants
• Referrals from other IRS divisions
• Other investigative agencies
•  Cases initiated by the Criminal Investigation Division

What is a Target letter?

A target letter is basically a courtesy letter given by the federal government, informing you that you are a suspect in a criminal investigation.  Once you receive a target letter, that's the first step to getting charged, which will most likely occur within 60 days of receiving your letter. 

If you have received a Target Letter - you should seek legal counsel immediately.

HOW THE GRAND JURY PROCESS WORKS

Because of the great power invested in federal grand juries you should not testify in front of or provide documents to a grand jury without first consulting an experienced criminal tax attorney.

Pre-grand Jury Interviews

You are not required to talk to the prosecutor or an IRS special agent before the grand jury process begins. Prosecuting attorneys will sometimes get unrepresented suspects into speaking with federal agents prior to a federal grand jury session by including in the letter accompanying the witness’ subpoena a direction that the suspect appear an hour or two before the grand jury process begins.

Never talk to government agents prior to a grand jury session without first consulting your attorney.

During the Grand Jury Hearing

Your lawyer can't be with you in the grand jury room, but they can be right outside the hearing and you have the right to consult with them - after each and every question if you wish. You can spend as much time as you need talking with your attorney, as long as you are not attempting to disrupt the grand jury process. You can also leave the grand jury room in order to brief your attorney about the questions being asked and your responses. In most jurisdictions you can take notes of any questions asked during the grand jury session. These can later be shared with your attorney.