Source: https://www.mcgeetaxlaw.com/tax-crimes.html
Timestamp: 2019-04-25 04:35:23+00:00

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In its Mission Statement, the IRS has indicated that Criminal Investigation serves the American public by investigating potential criminal violations of the Internal Revenue Code (IRC) and related financial crimes in a manner that fosters confidence in the tax system and compliance with the law (IRM 9.1).
Judging from the publications coming out of Washington and the nature of the cases I have been seeing, both the IRS and MDOR are very serious about both Enforced Collections and Criminal Investigations. I think that this trend will continue as governments continue to add enforcement personnel and continue to become more aggressive with collection activities. It appears that the difficult economic times, high government spending, and soaring federal debt are quickly making the "friendlier IRS" (envisioned in the IRS Restructuring & Reform Act of 1998) a thing of the past.
The IRS's Criminal Investigation (CI) Division serves the American public by investigating potential criminal violations of the Internal Revenue Code and related financial crimes in a manner that fosters confidence in the tax system and compliance with the law.
IRS Criminal Investigation (CI) is comprised of approximately 3,700 employees worldwide, approximately 2,600 of whom are special agents whose investigative jurisdiction includes tax, money laundering and Bank Secrecy Act laws. While other federal agencies also have investigative jurisdiction for money laundering and some bank secrecy act violations, IRS is the only federal agency that can investigate potential criminal violations of the Internal Revenue Code.
Criminal Investigation’s conviction rate is one of the highest in federal law enforcement. Not only do the courts hand down substantial prison sentences, but those convicted must also pay fines, civil taxes and penalties.
Actions associated with evasion of payment cases almost always involve some form of concealment of the taxpayer’s ability to pay the tax due and owing or the removal of assets from the reach of the IRS. Obstinately refusing to pay taxes due and possession of the funds needed to pay the taxes, without more, does not establish the requisite affirmative act necessary for an attempted evasion of payment charge.Examples of affirmative acts of evasion of payment include, but are not limited to: Placing assets in the names of others, dealing in currency, causing receipts to be paid through and in the name of others, causing debts to be paid through and in the name of others, and paying creditors instead of the government. See Cohen v. United States, 297 F.2d 760, 762, 770 (9th Cir. 1962); see also United States v. Carlson, 235 F.3d 466, 469 (9th Cir. 2000) Signing and submitting false financial statements to the IRS); United States v. Pollen, 978 F.2d 78, 88 (3d Cir. 1992); Placing assets out of the reach of the United States Government by maintaining more than $350,000.00 in gold bars and coins, platinum, jewelry, and gems in safety deposit boxes at bank, in a fictitious name);United States v. Beall, 970 F.2d 343, 345-47 (7th Cir. 1992)Concealing assets by using bank accounts in names of family members and co-workers); United States v. Brimberry, 961 F.2d 1286, 1291 (7th Cir. 1992) Falsely telling IRS agent that she did not own real estate and that she had no other assets with which to pay tax); United States v. Daniel, 956 F.2d 540, 542-43 (6th Cir. 1992).
Although filing a false return is a common method of attempting to evade the assessment of a tax, the requirement of an affirmative attempt to evade can be met by proof of any affirmative act undertaken with a tax evasion motive. Examples: keeping a double set of books, making false entries or alterations, or false invoices or documents, destruction of books or records, concealment of assets or covering up sources of income, handling of one’s affairs to avoid making the records usual in transactions of the kind, and any conduct, the likely effect of which would be to mislead or to conceal.
The Internal Revenue Service Criminal Investigation Division conducts criminal investigations regarding alleged violations of the Internal Revenue Code, the Bank Secrecy Act and various money laundering statutes. The findings of these investigations are referred to the Department of Justice for recommended prosecution.
Special agents analyze information to determine if criminal tax fraud or some other financial crime may have occurred. Relevant information is evaluated. This preliminary process is called a “primary investigation.” The special agent’s front line supervisor reviews the preliminary information and makes the determination to approve or decline the further development of the information. If the supervisor approves, approval is obtained from the head of the office, the special agent in charge, to initiate a “subject criminal investigation.” At this point, at least two layers of CI management have reviewed the ‘primary investigation’ material and determined there is sufficient evidence to initiate a subject criminal investigation.
Once an investigation is opened, the special agent obtains the facts and evidence needed to establish the elements of criminal activity. Various investigative techniques are used to obtain evidence, including interviews of third party witnesses, conducting surveillance, executing search warrants, subpoenaing bank records, and reviewing financial data. The special agent works closely with IRS Chief Counsel Criminal Tax Attorneys during the course of the criminal investigation. This process ensures all legal aspects of the investigation and prosecution recommendation are correctly addressed.
4. CI special agent in charge.
2. The United States Attorney for all other investigations.
Each level of review may determine that evidence does not substantiate criminal charges and the investigation should not be prosecuted.
If the Department of Justice or the United States Attorney accepts the investigation for prosecution, the IRS special agent will be asked by the prosecutors to assist in preparation for trial. However, once a special agent report is referred to for prosecution, the investigation is managed by the prosecutors.
The ultimate goal of an IRS Criminal Investigation prosecution recommendation is to obtain a conviction or plea. Approximately 3,000 criminal prosecutions per year provide a deterrent effect and signals to our compliant taxpayers that fraud will not be tolerated.
Too often I encounter taxpayers that have been contacted by IRS/MDOR Criminal Investigations and the taxpayer met with them without legal counsel. When I inquire as to why the taxpayer agreed to such meeting, I am usually advised that "they seemed real nice, like they wanted to work with me" or "I was hoping that if I went ahead and talked to them I could just explain things and they would go away." Unfortunately, both of these answers are almost always wrong.
If you are contacted (they usually show unannounced up at your home or business) by CID, you do not have to talk to them as you have 5th Amendment Constitutional rights to due process, representation, and to remain silent. I generally advise taxpayers to politely tell them that you want to consult with your attorney before speaking with them and that you will have your attorney contact them. Then, contact a competent attorney immediately and have that attorney contact them...don't ignore the situation hoping that it will just go away.

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