Detroit 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 Detroit. 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.

Detroit is Motor City - the automotive capital of America. Ford, GM, Stellantis. Thousands of dealerships, parts suppliers, repair shops, fleet operations. But here's what makes Detroit uniquely dangerous for tax fraud: when your income involves automotive industry transactions, you're facing prosecutors who have spent decades investigating exactly this kind of financial fraud. Dealer incentives. Warranty fraud. Parts kickbacks. Cash sales at used car lots. Fleet rebate manipulation. The Eastern District of Michigan doesn't just prosecute tax fraud - they prosecute automotive industry tax fraud with expertise no other district can match. If you're facing similar issues in other cities, see our guides on Chicago tax fraud lawyers, Indianapolis tax fraud lawyers, or Columbus tax fraud lawyers.

Most people in the automotive industry think their income structures are too complex for prosecutors to understand. Dealer holdback. Floor plan financing. Manufacturer incentives. Parts rebates. Trade-in allowances. The complexity doesn't confuse Detroit prosecutors - it's exactly what they see every day. The Eastern District of Michigan has developed unique expertise in automotive industry income. They understand how dealership accounting works. They know how manufacturers track incentive payments. They've seen every scheme dealers and suppliers use to hide income.

Motor City: Where Automotive Fraud Meets Federal Expertise

Heres the thing most people dont understand about tax fraud in Detroit. This isnt just another Midwest city. Its the automotive capital of America - and has been for over a century. The Big Three headquarters. Thousands of dealerships. Tens of thousands of parts suppliers. Repair shops on every corner. Fleet operations serving companies nationwide. The automotive ecosystem here generates hundreds of billions in annual revenue. And where theres revenue, theres tax fraud.

Think about what automotive industry income looks like. Dealer holdback payments from manufacturers. Floor plan interest rebates. Customer incentive payments that flow through dealerships. Parts supplier rebates for volume purchases. Cash transactions at used car lots. Trade-in value manipulation. Extended warranty kickbacks. The income structures are extraordinarly complex - and prosecutors in Detroit understand them better then anywhere else.

In Los Angeles, prosecutors develop entertainment fraud expertise. In New York, Wall Street fraud expertise. In Detroit? Automotive fraud expertise. EDMI prosecutors have spent there entire careers investigating dealership schemes, parts supplier kickbacks, and manufacturer incentive manipulation. They know how money flows through the automotive supply chain. They know were cash disappears. They know which records reveal hidden income. Your clever automotive accounting looks like obvious fraud to investigators who have seen thousands of similar schemes.

And heres the part that destroys people. Automotive industry income creates paper trails everywhere. Manufacturers report every incentive payment. Floor plan lenders track every vehicle. Parts suppliers document every rebate. Warranty companies record every claim. The IRS can reconstruct your dealership income from third-party reports even if you never provide them a single document. When your return dosent match there records, you become a target. Not maybe. Automaticly.

Dual Prosecution Reality

Unlike states with no income tax, Michigan has a 4.25% flat rate state income tax. That creates something most people dont understand until its too late: dual prosecution exposure. Federal prosecutors AND state prosecutors. Both interested in your case. Both investigating. Both potentially charging you with crimes.

When you evade taxes in Detroit, you dont face one adversary - you face two. The IRS investigates federal tax evasion while Michigan Department of Treasury investigates state tax evasion. These agencies coordinate. They share information. They share resources. What one discovers, the other learns. Your exposure multiplies.

Heres were the math gets scary. Federal tax evasion carries up to 5 years per count. Michigan tax evasion carries additional penalties. The sentences can run consecutively. And both jurisdictions can pursue charges independently - double jeopardy dosent protect you because there seperate sovereigns. One investigation, two prosecutions, combined sentences.

And in Detroit, federal and state investigators have decades of experience working together on automotive industry cases. The coordination is seamless. The information sharing is automatic. When your dealership or parts business attracts federal attention, state investigators already know about it. Theres no hiding from one by cooperating with the other. There both coming for you.

Eastern District of Michigan: Automotive Fraud Specialists

Most people only think about the IRS when they think about tax fraud prosecution. Thats a mistake that destroys lives. The Eastern District of Michigan handles federal prosecution across 34 counties in southeast Michigan. Detroit is headquarters. The resources concentrated here are substantial - and there specifically focused on the automotive industry crimes that the region produces.

EDMI prosecutors have experience with every type of automotive tax fraud. Dealership owners who didnt report cash sales. Parts suppliers who hid kickback income. Fleet operators who manipulated rebate payments. Used car dealers who underreported trade-in profits. Warranty companies that created phantom claims. This district may not have the securities cases of New York or the tech cases of Silicon Valley, but they have deep expertise in automotive industry financial crimes.

The FBI's Detroit field office coordinates closely with IRS Criminal Investigation. They share resources. They share intelligence. They build cases together. When you become a target in Detroit, your not facing a single agency. Your facing a coordinated multi-agency investigation with substantial resources and experienced investigators. And becuase Michigan has state tax prosecution, state investigators join the federal team. The combined resources focused on your case are overwhelming.

And heres the part most people miss. EDMI selects cases carefully. They cant prosecute everyone. So they focus on cases there certain to win - and cases that involve automotive industry elements that justify federal resources. If your reading this because federal agents contacted you about your dealership or parts business, 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 dealership income? Evidence. The detailed explainations you gave about your parts rebates? Admissions. The questions you answered honestly about your cash sales? 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 dealership controller can be subpeonaed. Your parts suppliers can be put on the witness stand. Everyone you talked to about your finances becomes a potential witness for the prosecution. The person you hired to help you can become the governments star witness against you.

And in Detroit, this audit-to-criminal pipeline includes state coordination. A federal audit that reveals state tax issues brings Michigan investigators into the mix. An audit showing unreported dealership income triggers both federal and state criminal exposure. What starts as a single audit can become a coordinated federal-state criminal investigation with overwhelming resources.

Federal and State Tax Fraud Penalties

Federal tax evasion under 26 USC 7201 carries up to 5 years in prison per count. Thats the starting point. But in Michigan, state penalties stack on top. You face dual exposure that dosent exist in states without income tax. The combined sentence exposure is substantially higher then in no-tax states like Texas or Florida.

But heres were it gets devastating in Detroit. If your tax fraud involves automotive industry elements, additional federal charges often stack on top. Wire fraud for electronic transactions: 20 years per count. Bank fraud for floor plan manipulation: 30 years per count. Money laundering for structuring cash: 20 years per count. The exposure compounds when automotive industry transactions are involved.

OK so heres were the math gets terrifying. Federal tax evasion: 5 years per count. Michigan tax evasion: additional years. Wire fraud: 20 years per count. Bank fraud: 30 years per count. Money laundering: 20 years per count. Sentences can run consecutively. Add multiple counts across multiple statutes and both sovereigns, and your looking at combined exposure that can exceed decades. And federal sentences are served at 85% minimum - no early release for good behavior.

Fines for federal tax evasion can reach $100,000 for individuals and $500,000 for corporations. Michigan adds more. Plus restitution - every dollar you allegedly evaded, with interest and penalties. Plus forfeiture of property involved in or derived from the crime. Your dealership. Your inventory. Your real estate. The financial destruction can be total. Everything you built in the automotive industry - at risk.

Signs Your Already a Criminal Target in Detroit

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 dealership financials, traced your parts rebates, and concluded that you probly commited a crime.

In Detroit, watch for automotive-specific warning signs. Questions about manufacturer incentive payments that seem unusualy detailed. Requests for floor plan records going back multiple years. Inquiries about cash sales or trade-in values. Subpoenas sent to your parts suppliers. Agents interviewing your sales staff. The IRS has become sophistcated about automotive industry compensation - they know what to look for and how to find it. If there asking questions that reveal deep understanding of how dealership accounting works, your dealing with investigators who specialize in automotive fraud.

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. 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 dealership records. Interviewing your employees. Talking to your parts suppliers. Requesting manufacturer incentive reports. Seizing financial records. Freezing bank 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 Detroit, both federal and state investigators may be moving simultaneously. IRS-CI interviewing your controller while Michigan Treasury agents talk to your accountant. FBI pulling manufacturer records while state investigators review your sales tax returns. The coordinated investigation means multiple fronts of activity, multiple sources of pressure, multiple paths to evidence against you.

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 business lawyer. Someone who handles federal tax crimes exclusivly. Someone who understands IRS-CI, the Eastern District of Michigan, and automotive industry investigations. Someone whos been in the trenches. This is the one window were intervention can change everything.

Why You Need a Detroit Tax Fraud Lawyer NOW

Your reading this because something happened. An agent visit. A letter from the IRS. 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, Eastern District of Michigan prosecutors, and automotive industry fraud investigations. We understand the unique threat your facing in Detroit - where dual prosecution exposure multiplies your risk and automotive industry expertise means they understand your income structure. 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 dealership owners and parts suppliers who thought they could handle it themselves and ended up facing charges that could have been prevented.

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 subpoenaing records. There coordinating with state investigators. 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 Eastern District prosecutors think. We know how automotive industry investigations work. 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 both federal and state investigators spend building there case against you. Make the call. Protect yourself. Protect your family. Protect your dealership. Because once the indictment comes down, protecting becomes much, much harder.

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