Most CPAs, Enrolled Agents, and other tax return preparers are smart, precise and honest. But
there are a few that are recklessly dishonest. If your accountant files incorrect tax returns, the
IRS may investigate and prosecute that accountant.
Imagine if the IRS asks you for help in a criminal investigation against your tax preparer. Would
you help the IRS? There are some defensive points to consider. First let’s consider why others
have agreed to help the IRS.
Main Reasons Why People Help the IRS
- General fear of IRS
- Lack of knowledge of their rights, effects, or consequences
- To make the tax accountant responsible for any dishonesty
- To deflect blame away from self
- To “come clean”, to unburden, or to give confession
This article is not meant to advise someone on whether to speak or cooperate with the federal
government. However, this information can help weigh out their options on whether to speak
with or work with the IRS.
Here Are The 3 Critical Points That You Absolutely Must Know
CRITICAL POINT #1 – You are already a potential suspect.
- The IRS selected you because there are already known or suspected significant errors with your
tax return. The IRS wants you to give an account of what was on your tax return. - What the tax return should have looked like. And maybe an account of what happened with the preparer.
- What was the preparer’s conduct in including that false information on the tax return.But also consider this: Maybe part of the reason for the incorrect filing was due to your own
conduct. And that concern introduces the next critical point.
CRITICAL POINT #2 – Being a witness puts you at risk of self-incrimination.
If your tax return actually contained false information, that special agent will want to have a
conversation about those false parts. That investigator will want to know what role your tax
return preparer played in filing that false information. But then that also includes discussing
what role you played.
In particular, the investigator will want to know whether you committed any potentially
criminal conduct. You will be in the exact position to have to explain to the government how
you may have willfully filed a false tax return.
CRITICAL POINT #3 – The IRS has some leverage over you.
Most people in this position would absolutely not want to participate to assist the IRS as a
witness. If the government suspects that your tax return was wrong (usually significantly
wrong), and that you knew or should have known about it, then the government does have the
option or pursuing you too.
See this related article on a few IRS investigation “secrets”.
How to Decide Your Next Steps
Again, to recap those 3 CRITICAL POINTS:
-
- 1) That the government does have some leverage over you.
- 2) You risk self-incrimination when you do participate, but
- 3) That you are already potentially a suspect,
There is one additional point:
You are entitled to have guidance and representation by an attorney.
As you consider your options, make sure you speak with a federal tax defense attorney to help
spell out your rights. Speak with an attorney who understands the IRS processes, both civil and
criminal.
And make certain that you feel like you can relate to the lawyer, because trust is a huge factor.
This is your life.