Recent Rise in IRS Criminal Tax Cases Presents Risks for Noncompliant Taxpayers

We have recently seen an uptick in Internal Revenue Service (IRS) criminal tax cases. This presents significant risks for noncompliant taxpayers, as federal criminal charges carry substantial penalties. Learn when the IRS can pursue criminal tax cases and what is at stake when the IRS decides to pursue criminal charges from Washington D.C. criminal tax attorney Kevin E. Thorn, Managing Partner of Thorn Law Group:

Examples of Potential Allegations in IRS Criminal Cases

While the IRS can pursue criminal tax cases in a wide range of circumstances, most of these cases involve allegations of intentional tax evasion or tax fraud. If the IRS learns of suspected intentional wrongdoing through an audit, a whistleblower complaint, or information received from one of its partner law enforcement agencies, its Criminal Investigation division (IRS CI) can launch an investigation focused on substantiating criminal charges. Some examples of potential charges in these cases include:

• IRS Income Tax Evasion or Tax Fraud – Many IRS criminal cases involve allegations of income tax evasion or tax fraud. This includes allegations of intentionally underreporting income and using abusive tax avoidance schemes.
• IRS Business Tax Crimes – Businesses and their owners can face prosecution for a wide range of offenses involving IRS business taxes. Along with business income-related offenses, this also includes offenses such as PPP and ERC fraud, which remain top enforcement priorities for the IRS in 2025.
• IRS Payroll Tax Crimes – The IRS is increasingly targeting businesses suspected of IRS payroll tax violations with criminal charges as well. This includes violations such as falsely claiming payroll expenses and failing to maintain trust deposit compliance.

Again, these are just examples. From offshore bank account abuse to money laundering and wire fraud, IRS CI targets a wide range of other suspected criminal offenses as well. If an investigation uncovers sufficient evidence to warrant criminal charges, IRS CI then works with the U.S. Department of Justice (DOJ) to prosecute the individual(s) or business(es) involved.

Examples of Potential Penalties in IRS Criminal Cases

As mentioned above, criminal tax violations carry substantial penalties under federal law. In addition to liability for back taxes and interest, individuals and businesses targeted by IRS CI and the DOJ can also face substantial fines and prison time. Some examples of potential penalties include:

• Willful Failure to Collect or Pay Over Tax (26 U.S.C. Section 7202) – Up to a $10,000 fine and five years of federal imprisonment (plus the IRS’s trust fund recovery penalty (TFRP) in cases involving IRS payroll taxes).
• Willful Failure to File Return, Supply Information or Pay Tax (26 U.S.C. Section 7203) – Up to a $25,000 fine ($100,000 for companies) and up to a year of federal imprisonment.
• Fraud and False Statements (26 U.S.C. Section 7206) – Up to a $100,000 fine ($500,000 for companies) and up to three years of federal imprisonment.

Again, these are just examples. Criminal tax allegations can lead to a wide range of other charges and penalties as well. If you need to consult with an IRS and DOJ criminal tax attorney about the risks you are facing, we encourage you to contact us promptly for more information.

Schedule a Confidential Consultation with Washington D.C. Criminal Tax Lawyer Kevin E. Thorn

To schedule a confidential consultation with Washington D.C. criminal tax lawyer Kevin E. Thorn, Managing Partner of Thorn Law Group, contact us today. Call 202-349-4033 or contact us confidentially online now.