Denver Tax Fraud Lawyers

Welcome to Spodek Law Group. Our mission is simple: we believe everyone deserves a fighting chance when the government comes after them. If you're reading this, something happened that made you search for tax fraud lawyers in Denver. Maybe the IRS sent a letter. Maybe federal agents showed up at your door. Maybe your accountant called with news that made your stomach drop. Whatever brought you here, you need to understand something most people don't realize until it's too late.

Denver is the cannabis capital of America. Colorado was first to legalize recreational marijuana. Billions in industry revenue. Thousands of dispensaries, cultivators, and cannabis-related businesses. But here's what cannabis business owners don't realize - federal law still considers marijuana a Schedule I controlled substance. Section 280E of the Internal Revenue Code prevents cannabis businesses from taking normal business deductions. When your tax fraud connects to cannabis - and in Denver, it often does - you're not just facing IRS scrutiny. You're facing prosecutors who can add federal drug charges to your case. Tax fraud in Denver doesn't always stay tax fraud. It can become drug trafficking.

Most people in the cannabis industry think state legalization means safety. Colorado approved it. The state licenses them. The state taxes them. But federal law doesn't care what Colorado legalized. The IRS still requires cannabis businesses to pay taxes - but Section 280E prevents them from deducting normal business expenses like rent, utilities, or employee wages. This creates crushing tax liability. And when business owners try to work around it, they become targets for tax fraud prosecution. If you're facing similar issues in other cities, see our guides on Seattle tax fraud lawyers, Charlotte tax fraud lawyers, or Chicago tax fraud lawyers.

The Dual Prosecution Reality

Heres the thing most people dont understand about tax fraud in Denver. Colorado has a state income tax. The rate is a flat 4.4% - lower then California or New York, but it exists. That means the Colorado Department of Revenue actively pursues tax fraud. That means state prosecutors can charge you. That means you face TWO governments, not one. Federal prosecution and state prosecution. Both real. Both aggressive. Both watching you.

In Texas or Florida, tax fraud is purely a federal matter. The IRS investigates. Federal prosecutors decide whether to charge. Federal courts handle the case. There no state agency with jurisdiction over income tax fraud becuase there no state income tax. Its simpler. Not better for defendants - but simpler. You know who your adversary is.

But in Denver? You face the District of Colorado on the federal side. IRS Criminal Investigation. DEA investigators. FBI Financial Crimes. Federal prosecutors building there case. And simultaneously, you face Colorado state enforcement. State investigators. State attorneys. A completely seperate prosecution that runs parallel to the federal case. Two investigations. Two sets of charges. Two potential prison sentences.

And heres were Denver becomes uniquely dangerous. If your tax fraud connects to cannabis, federal prosecutors can add drug charges. Cannabis is still a Schedule I controlled substance under federal law. State legalization dosent change that. A tax fraud case that involves cannabis income can become a drug trafficking case. Thats not tax evasion anymore. Thats federal drug charges with mandatory minimum sentences.

Cannabis Capital: Where Tax Fraud Meets Drug Law

Denver isnt just another city with some cannabis dispensaries. Its the cannabis capital of America. Colorado legalized recreational marijuana in 2012 - first in the nation. The industry has grown to billions in annual revenue. Dispensaries on every corner. Cultivation facilities. Manufacturing operations. Delivery services. Testing labs. The entire cannabis ecosystem operates here at scale that other states cant match.

When your tax fraud connects to cannabis, everything changes. Underreporting income from a regular business is tax evasion. Underreporting income from a cannabis business - from cultivation sales, dispensary revenue, product manufacturing - is potentially drug trafficking. Thats a different category of crime. Different investigators. Different penalties. Different mandatory minimums that take judicial discretion away from judges.

Section 280E of the Internal Revenue Code is the trap most cannabis business owners walk into. Because marijuana is federally illegal, cannabis businesses cant deduct ordinary business expenses. No deducting rent. No deducting utilities. No deducting wages. No deducting marketing. The only deduction allowed is cost of goods sold. This creates effective tax rates of 70% or more on some cannabis businesses. Crushing. Impossible.

And heres were people destroy themselves. They try to work around 280E. They create seperate management companies. They allocate expenses to non-cannabis entities. They underreport cannabis revenue. They manipulate cost of goods sold calculations. Every one of these schemes is exactly what IRS-CI investigators are trained to find. The District of Colorado has spent a decade watching cannabis businesses try to cheat 280E. They know every trick. And when they find you using one, they dont just charge tax fraud. They can add drug charges.

District of Colorado: Cannabis Industry Expertise

Most people only think about the IRS when they think about tax fraud prosecution. Thats a mistake that destroys lives. The District of Colorado handles federal prosecution across the entire state. Denver is headquarters. The resources concentrated here are substantial - and theyve been specifically focused on cannabis industry crimes since legalization began.

Think about what that means for your case. District of Colorado prosecutors have spent over a decade watching the cannabis industry develop. They understand 280E manipulation. They know how dispensary owners try to hide revenue. They know how cultivators underreport sales. They know how processing facilities allocate expenses. The prosecutors who investigated the first wave of cannabis tax fraud? There still here. More experienced then ever. And there looking at your returns now.

The DEA maintains significant presence in Colorado - and they coordinate closely with IRS Criminal Investigation. They share resources. They share intelligence. When a tax fraud investigation reveals cannabis connections, DEA gets involved. What started as an IRS audit can become a joint IRS-DEA investigation. Your facing coordinated multi-agency attention with substantial resources and experienced investigators who understand cannabis industry financial crimes.

And heres the part most people miss. The District of Colorado selects cases carefully. They cant prosecute everyone. So they focus on cases there certain to win. If your reading this because federal agents contacted you, your case has already been evaluated. Theyve already decided your worth pursuing. They already think they can convict you. IRS-CI has a 90% conviction rate for a reason. They dont bring cases they might lose.

When Your Civil Audit Becomes Criminal

An IRS audit seems like a tax problem, not a criminal one. Your dealing with a Revenue Agent, answering questions, providing documents, trying to resolve the issue. Its stressful but it feels managable. Your cooperating. Your being helpful. Your doing everything there asking. But heres what nobody tells you - that auditor is trained to spot criminal indicators. And when they find them, they refer you to Criminal Investigation without telling you.

Let that sink in. The person your cooperating with, the person your trying to help, the person your providing documents to - that person can send your file to criminal investigators and never tell you it happened. The referral happens through Form 2797. Your never notified when this form is filed. There no letter, no phone call, no warning. The civil audit continues like nothing changed, but in the background, a Special Agent has been assigned to your case and evidence gathering begins.

Everything you said during your "civil" audit - every explaination you gave trying to be helpful - is now being compiled into a criminal case against you. Your cooperation is building the prosecutions file. The helpful documents you provided about your cannabis revenue? Evidence. The detailed explainations you gave about your 280E calculations? Admissions. The questions you answered honestly about your expense allocations? Self-incrimination. You were building the case against yourself and you didnt even know it.

Heres the part that makes defense lawyers cringe. You might think your accountant protects you. Theres no accountant-client privilege for tax matters. None. Your accountant can be compelled to testify against you. Your CPA can be subpeonaed. Your bookkeeper can be put on the witness stand. Everyone you talked to about your taxes becomes a potential witness for the prosecution. The person you hired to help you can become the governments star witness against you.

And in Denver, this audit-to-criminal pipeline can trigger drug investigations too. An IRS audit that reveals cannabis-connected income discrepancies can bring in DEA. What starts as a tax audit can become a full drug trafficking investigation with agencies you never expected. Two agencies become three. The exposure multiplys exponentialy.

Federal and Colorado Tax Fraud Penalties

Federal tax evasion under 26 USC 7201 carries up to 5 years in prison per count. Thats the starting point. But Colorado tax fraud penalties stack on top of federal penalties, not instead of them. Colorado tax evasion carries its own prison time. Fines. Restitution. And these penalties are on top of whatever the federal government imposes.

But heres were it gets devastating in Denver. If your tax fraud connects to cannabis, drug charges can stack on top. Federal drug trafficking charges carry mandatory minimum sentences. Conspiracy to distribute marijuana: 5 years mandatory minimum for significant quantities. Manufacturing marijuana: additional mandatory minimums. Money laundering connected to drug proceeds: up to 20 years per count. The exposure compounds when cannabis is involved in ways that ordinary tax fraud never does.

OK so heres were the math gets terrifying. Federal tax evasion: 5 years per count. Colorado tax evasion: additional time. Drug conspiracy: 5-10 year mandatory minimum. Money laundering: 20 years per count. Sentences can run consecutively. Add multiple counts across multiple statutes, and your looking at combined exposure that can exceed decades. And federal sentences are served at 85% minimum - no early release for good behavior. Mandatory minimums mean judges cant give you less even if they want to.

Fines for federal tax evasion can reach $100,000 for individuals and $500,000 for corporations. Colorado adds its own fines. Drug charges add more. Plus restitution to all jurisdictions - every dollar you allegedly evaded, with interest and penalties. Plus potential forfeiture of your cannabis business, your property, your bank accounts. The financial destruction can be total. Everything you built can be seized.

Signs Your Already a Criminal Target in Denver

When federal agents contact you, the type of agent matters more then anything else. IRS Revenue Agent means civil audit - you still have time to prepare, options are still open, your not necesarily in criminal jeopardy. IRS Special Agent means criminal investigation - they've already decided your a target. If a Special Agent shows up at your door, the investigation has been running for months or years before you ever knew about it.

How do you know which type your dealing with? Special Agents carry badges and guns. Revenue Agents dont. Special Agents will introduce themselves as being from IRS Criminal Investigation. There not there to audit your return. There not there to help you resolve a tax problem. There there to gather evidence for a criminal prosecution. And by the time they show up, theyve already reviewed your returns, analyzed your cannabis licenses, traced your revenue, and concluded that you probly commited a crime.

But in Denver, watch for cannabis-specific warning signs. If DEA agents contact you, your facing potential drug charges on top of tax charges. If questions focus specifically on 280E allocations, investigators are looking for tax fraud patterns. Multiple agencies contacting you means a coordinated investigation. Task force involvement. The stakes just multiplied beyond ordinary tax fraud into potential drug trafficking territory.

Your instinct will be to explain yourself. Clear things up. Show them your not a criminal. Answer there questions. Provide more documents. Cooperate fully. This is exactly what they want, and it destroys your defense. Anything you say without a lawyer present becomes evidence. Every word. Every document. Every helpful explaination. And investigators are trained to ask questions that elicit incriminating responses. They know what there doing. You dont.

The correct response is to politely decline to answer and call a tax fraud attorney immediatly. Not tomorrow. Not after you "get your documents together." Not after you talk to your accountant or your cannabis compliance consultant. Immediatly. Every minute you spend talking to investigators without counsel is a minute your making your situation worse.

What Happens in the First 48 Hours

The moment you learn of a criminal tax investigation, a clock starts. You have 48 hours before critical options start closing. Agents are trained to extract statements fast - before you have time to think, before you can talk to a lawyer, before you understand whats happening. Every word you say without counsel is a mistake that cant be undone.

Heres what there doing while your panicking. Subpoenaing your dispensary records. Interviewing your employees. Talking to your suppliers. Requesting your banking records - if you even have banking. Seizing documents. Freezing accounts. Building there case. Your business is being dismantled while you try to figure out whats happening. By the time most people understand the severity, the damage is already done.

And in Denver, multiple agencies may be moving simultaneously. IRS-CI interviewing your accountant while DEA investigators talk to your cultivation suppliers. Information flowing between agencies in real time. The coordinated investigation means multiple fronts of activity, multiple sources of pressure, multiple paths to evidence against you. Tax investigators and drug investigators working together.

The only correct action in the first 48 hours: say nothing, sign nothing, call a tax fraud lawyer. Not a general attorney who dabbles in tax issues. Not your cannabis business lawyer. Someone who handles federal tax crimes exclusivly. Someone who understands IRS-CI, the District of Colorado, and the intersection of cannabis law and tax law. Someone whos been in the trenches. This is the one window were intervention can change everything.

Why You Need a Denver Tax Fraud Lawyer NOW

Your reading this because something happened. An agent visit. A letter from the IRS. A notice from Colorado Department of Revenue. A phone call from your accountant that made your stomach drop. Right now, today, you have options you wont have next week. Pre-indictment intervention can sometimes prevent charges. Voluntary disclosure programs may still be available. Cooperation agreements can be structured. Plea negotiations can begin early. But that window closes fast.

Heres were the timing matters. Before indictment, your a "target" or a "subject" - categories that have some room for manuver. After indictment, your a defendant. The charging decision has been made. The grand jury has returned a true bill. Your facing trial. Everything changes. The leverage shifts. The options narrow. The cost skyrockets.

At Spodek Law Group, we handle federal tax fraud cases. Todd Spodek has defended clients against IRS-CI, District of Colorado prosecutors, and cannabis-related fraud investigations. We understand the unique threat your facing in Denver - where cannabis industry creates multi-agency investigations that can add drug charges to tax fraud. We've seen what happens when people wait. We've seen clients who talked to agents without counsel and destroyed there own cases. We've seen cannabis business owners who thought they could handle it themselves and ended up facing drug trafficking charges they never saw coming.

The consultation is free. The cost of waiting isnt. Call 212-300-5196. The prosecutors arnt waiting for you to get organized. There building there case right now, today, while your reading this article. There interviewing witnesses. There coordinating with DEA investigators. There preparing charges. The question is wheather you'll have representation when they make there move - or wheather you'll be one more conviction in there statistics.

We've been doing this for years. We know how IRS-CI builds cases. We know how District of Colorado prosecutors think. We know how cannabis investigations escalate. We know the judges, the courtrooms, the procedures. And we know what happens to people who try to navigate this system without experienced counsel. Some of them are in federal prison right now, serving sentences that could have been avoided or reduced if they had called a lawyer earlier.

The choice is yours. But the window is closing. Every day you wait is a day the government spends building there case against you. Make the call. Protect yourself. Protect your family. Protect your future. Because once the indictment comes down, protecting becomes much, much harder.

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