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How an IRS Criminal Investigation Starts and Your Rights
An IRS criminal investigation starts in one of two places: inside the IRS, when an auditor, a collection officer or an analyst detects possible fraud and the case is reviewed for referral, or outside it, when IRS Criminal Investigation receives information from the public, other law enforcement agencies or U.S. Attorneys offices. All State Tax Resolution (Sabih Shafi, EA, IRS Enrolled Agent) starts these cases from the first call, handles the IRS civil and collection side directly, and brings in our partner tax attorney for the criminal defense side, so you work with one team.
Want a second set of eyes on your situation? Book a free 20-minute tax review.
The two ways a case begins
The IRS says criminal investigations can be initiated from information inside the IRS when a revenue agent (auditor), revenue officer (collection) or investigative analyst detects possible fraud. That is the civil-to-criminal path: the person who spots the problem may be an examiner or collection employee the taxpayer has already been dealing with.
The second path comes from outside. IRS-CI also routinely receives information from the public, from other law enforcement agencies and from U.S. Attorneys offices. In both cases, the first piece of information is only a lead, not a case.
Review comes before a case opens
The IRS says that before a subject criminal investigation opens, a front line supervisor reviews the preliminary information, then the special agent in charge approves it. By the time a case is formally opened, at least two layers of IRS-CI management have reviewed it.
This is a useful point to hold onto. The IRS also says each level of later review may determine that the evidence does not substantiate criminal charges and the investigation should not be prosecuted. A criminal investigation is a process with decision points, not a verdict.
What a civil employee must do when fraud appears
The Internal Revenue Manual is specific. Under IRM 25.1.2, if affirmative acts of fraud are established, the compliance employee must suspend collection or examination activity and notify the group manager and the fraud enforcement advisor, who recommends a referral to Criminal Investigation if criminal criteria are met.
Two limits keep this from being a hair trigger. IRM 25.1.6 says the fact that a taxpayer has tax due is not sufficient to assert the civil fraud penalty, because an affirmative act of fraud must also be present. And it describes willful intent to defraud as an intentional wrongdoing with the specific purpose of evading a tax believed by the taxpayer to be owing.
If the case does not go criminal, the file does not simply disappear. Under IRM 25.1.2, if criminal criteria are not met, or Criminal Investigation returns the case, the IRS considers the civil fraud penalty under IRC 6663 and/or the fraudulent failure to file penalty under IRC 6651(f). IRM 25.1.6 adds that a civil fraud case may be developed from the facts of a civil examination or may result from a case initiated by Criminal Investigation. The civil penalty is covered in civil fraud versus criminal tax evasion.
What the first contact looks like
If a special agent contacts you in person, the Internal Revenue Manual sets expectations. At the initial interview the special agent identifies themselves as an IRS-CI special agent, displays credentials and badge, and provides a unique identification number and phone number. Special agents are also required to give the subject and the subject's representative that same number and phone number at the initial contact.
You can check who is at the door. IRS-CI offers an Employee Verification Tool to confirm that a special agent works for IRS-CI, and the IRS says the tool is not available during all enforcement actions. Write down the name, the number, the time and what was said.
Your rights in a non-custodial interview
Under IRM 9.4.5, special agents advise an individual of constitutional rights during non-custodial interviews when the individual is a subject of an investigation. The advisement for a subject says:
Under the Fifth Amendment, the agent cannot compel you to answer questions or submit information that might tend to incriminate you.
Anything you say and any documents you submit may be used against you in any criminal proceeding.
You may, if you wish, seek the assistance of an attorney before responding.
The same section says the special agent will immediately terminate the interview if, at any stage, the subject indicates they wish to exercise rights to withhold testimony or records, or to consult with an attorney. It also says the agent will not use language that could be interpreted as a promise of immunity or settlement of the subject's investigation. If anyone suggests that talking will make the problem go away, that is not something the manual allows the agent to promise.
A different rule applies to people who are witnesses and not subjects. The manual says a witness in a criminal investigation has the right to be accompanied, represented and advised by counsel.
The IRS summons
A summons is the other tool people ask about. Under 26 U.S.C. 7602(a), the IRS may summon the person liable for tax, or any person with possession of relevant books of account, to appear, produce records and give testimony under oath. Section 7602(b) includes, among the purposes, inquiring into any offense connected with the administration or enforcement of the internal revenue laws.
There are limits. Under 7602(d), no summons may be issued, and no action to enforce one begun, for a person while a Justice Department referral is in effect. And under 26 U.S.C. 7609(a), when a summons seeks records relating to another identified person, notice goes to that person within 3 days of service and no later than the 23rd day before the examination date, with an explanation of the right to bring a proceeding to quash. If a bank or other third party gets a summons about you, you may receive that notice.
What investigators can do once a case is open
The IRS lists the techniques available once an investigation is opened: interviews of third party witnesses, surveillance, search warrants, forensic examination of evidence, subpoenaing bank records and reviewing financial data. A conversation with a special agent is therefore not like a conversation with an auditor, since agents can draw on sources beyond the taxpayer.
What not to do
Do not alter, discard or create records after you learn of the inquiry. Corruptly obstructing or impeding the due administration of the tax code is its own offense, punishable under 26 U.S.C. 7212(a) by up to 3 years in prison. Mishandled records can create a separate problem.
What to do first
Preserve everything. Keep returns, bank records, invoices, emails and workpapers exactly as they are.
Record the contact. Note the agent's name, the unique identification number, the phone number and the date, and confirm identity through the IRS tool.
Do not decide on the spot how to answer. You can say you would like to consult before responding. The manual says the interview ends at that point.
Make one call. We take it from there, starting with a free 20-minute review.
Working with an Enrolled Agent
All State Tax Resolution is led by Sabih Shafi, EA, an IRS Enrolled Agent, and works with clients in every state and abroad by phone and video. We start your case from the first call. We handle the IRS civil and collection side directly as an Enrolled Agent firm, and when a case needs criminal defense, we bring in our partner tax attorney. You work with one team, and we do not promise any outcome.
Frequently Asked Questions
Can a normal IRS audit turn into a criminal investigation?
It can in one situation. Under IRM 25.1.2, if affirmative acts of fraud are established, the compliance employee must suspend activity and notify management and the fraud enforcement advisor, who recommends a referral if criminal criteria are met. Owing tax alone is not enough. IRM 25.1.6 says an affirmative act of fraud must also be present.
What is a special agent allowed to ask me?
A special agent may ask questions, but the manual says that if you are a subject, the agent advises you that you cannot be compelled to answer questions that might incriminate you. Anything you say or any documents you submit may be used against you. You may seek an attorney before responding, and the agent will end the interview if you say you want to.
Does an IRS summons mean I am being criminally investigated?
Not necessarily. A summons lets the IRS require records and testimony, and section 7602(b) lists inquiring into any offense among the purposes, alongside ordinary civil purposes. Under 7602(d) the IRS cannot issue one for a person while a Justice Department referral is in effect. Review any summons with a representative before the date it names.
Can a special agent promise me nothing will happen if I talk?
No. The manual says the special agent will not use language that could be interpreted as a promise of immunity or settlement of the subject's investigation. The IRS also says each level of review may decide the evidence does not support charges, but no agent can predict that outcome for you during an interview.
Who do I call first if a special agent contacts me?
Call us. All State Tax Resolution starts the case from the first call, a free 20-minute review, handles the IRS civil and collection side directly as an Enrolled Agent firm, and brings in our partner tax attorney for the criminal defense side. You work with one team, and you do not need to arrange separate help first.
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Last reviewed: October 2026 by Sabih Shafi, EA
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This article is general information, not individual tax advice. If you want to talk through your own IRS situation, book a free 20-minute review or call or text us directly.
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