Tips to Avoid an IRS Criminal Investigation or, Worse, a Tax Grand Jury Investigation (4/27/13)

Kelly Phillips Erb, here, has authored this article:  Ten Ways Not To Say Goodbye: Avoiding Jailtime For Tax Charges (Forbes 4/26/13), here.  She opens her top ten list as follows:

When asked by a (repeat) client how to stay out of jail, criminal defense attorney Charlie Thomas offered this sage advice: Stop stealing shit. 

The same logic applies to taxes. If you want to avoid jail time, for the most part, the best advice is to file and pay on time. But I know that doesn’t always happen so let’s assume that you didn’t do that. What next? 

It’s important to understand that the Internal Revenue Service doesn’t want to throw you in jail. Criminal investigations consume a lot of resources: they take time and they’re expensive. So for most taxpayers, a criminal investigation isn’t a first step, but rather the end process of lengthy attempts to get you to resolve your tax obligations. In other words, it’s rare that an agent will show up on your doorstep one day with cuffs in hand.

Here are her top ten tips - I provide the bullet point only; she has discussion in her article.

1. File and pay your taxes on time. 
2. Open your mail and respond appropriately. 
3. Cooperate during an examination/audit. 
4. Be consistent. 
5. Don’t destroy records. 
6. Don’t lie. 
7. Don’t be overconfident. 
8. Hire a defense attorney. 
9. Read the fine print. 
10. Understand that there is no Perry Mason.