IRS Fraud Enforcement Office Will Open in the Midst of the COVID-19 Crisis

On March 5, 2020, the Internal Revenue Service (IRS) announced the formation of a new Fraud Enforcement Office within its Small Business/Self-Employed Division. While the COVID-19 crisis has put many things on hold, the Fraud Enforcement Office’s director, Damon Rowe, recently told Law 360 that the office is on pace to open as scheduled:

“As it expands its workforce, the fraud office already has wheels on the ground, with employees getting advice from attorneys in the IRS Office of Chief Counsel and forming relationships across the agency . . . .

“The office is pushing resources to areas that have been identified as agencywide enforcement priorities, including microcaptive insurance transactions, syndicated conservation easements, coronavirus-related fraud and virtual currency. As it works cases, Rowe said, the fraud office will seek to increase the number of quality criminal and civil fraud referrals.”

5 Important Facts about the IRS Fraud Enforcement Office

As the Fraud Enforcement Office expands its operations and works with other offices and divisions to target suspected federal tax evasion and tax fraud, it will be important for potential targets to be aware of the risks involved. Here are five important facts about the IRS Fraud Enforcement Office from New Jersey tax defense lawyer Kevin E. Thorn, Managing Partner of Thorn Law Group:

1. The IRS Fraud Enforcement Office Will Be Targeting Small Businesses and Business Owners

As it is housed within the IRS’s Small Business/Self-Employed Division, the Fraud Enforcement Office will be focusing its efforts on uncovering tax violations committed by businesses with less than $10 million in assets. This includes part-time businesses, start-ups, and businesses with no employees.

2. The IRS Fraud Enforcement Office has a Number of Specific Priorities

As summarized in the quote above, the Fraud Enforcement Office will initially be focusing on four specific priorities. As a result, small insurance companies, small real estate businesses, businesses that sell coronavirus-related products and services, and businesses that utilize Bitcoin and other cryptocurrencies are particularly at risk for being targeted.

3. IRS Fraud Enforcement Office Investigations Can Lead to Civil or Criminal Penalties

Similar to other IRS audits and investigations, investigations conducted by the Fraud Enforcement Office can lead to civil or criminal penalties.

4. Avoiding Penalties in an IRS Fraud Enforcement Office Investigation Will Require a Proactive Defense

For small businesses and business owners targeted by the IRS Fraud Enforcement office, avoiding civil and criminal penalties will require a proactive defense. Those that simply allow an investigation to run its course will be far more likely to face liability for additional taxes, interest and penalties.

5. Small Businesses and Business Owners Targeted by the IRS Fraud Enforcement Office Should Engage Defense Counsel Promptly

In order to avoid unnecessary liability, small businesses and business owners targeted by the IRS Fraud Enforcement Office will need to rely on the advice of experienced tax defense counsel. If you are being targeted in New Jersey and would like to speak with an attorney, contact Thorn Law Group today.

Request a Confidential Consultation at Thorn Law Group

If you need experienced defense counsel for a federal tax fraud investigation, contact us now to schedule a confidential consultation with New Jersey tax defense lawyer Kevin E. Thorn, Managing Partner of Thorn Law Group. To speak with Mr. Thorn as soon as possible, call 2201-355-8202, email ket@thornlawgroup.com or tell us how to contact you online now.