IRS Showed Up at My Business Without Warning
You're at your business on a normal Tuesday. Someone walks in - business attire, polite, professional. They ask to speak with you privately. You notice the badge clipped to their belt. And then you see the gun.
This isn't a routine visit.
IRS Criminal Investigation special agents don't show up at businesses to ask questions. They show up to confirm what they already know. By the time an IRS-CI special agent walks through your door, the investigation has likely been running for 12 to 24 months. Multiple layers of IRS management have reviewed your case. They've concluded there's enough evidence to pursue criminally. And they maintain a 90% conviction rate once they do.
Welcome to Spodek Law Group. We handle federal criminal defense for IRS investigations across New York and nationwide. If IRS Criminal Investigation has contacted you - at your business, your home, anywhere - this article explains what's actually happening and what you need to do in the next 60 seconds. The decisions you make right now will determine how this plays out.
When IRS-CI Shows Up, They Already Know
First, you need to understand who's at your door. The IRS has multiple types of employees who can visit businesses. Revenue Officers handle collections - they're civil employees trying to collect unpaid taxes. Revenue Agents conduct audits - also civil. In 2023, the IRS actually ended most unannounced visits from these civil employees. Commissioner Werfel announced the policy change to protect both agents and taxpayers.
But Criminal Investigation was explicitly exempted.
Heres what most people dont realize. When Commissioner Werfel announced that policy change, he specifically stated: "Our Criminal Investigation agents, like other law enforcement officers, have different requirements, and their investigative work will still require unannounced visits." IRS-CI special agents are the only armed IRS employees. They carry badges and guns. If someone shows up at your business unannounced with a firearm, your not dealing with a collections issue. Your dealing with a criminal investigation.
The timeline is the part that catches people off guard. IRS criminal investigations typically run 12 to 24 months before any contact with the target. There's a preliminary phase where special agents analyze information to determine if criminal tax fraud may have occured. Then supervisors review. Then the special agent in charge approves initiating a "subject criminal investigation." By the time they knock on your door, at least two layers of CI management have already determined theres sufficient evidence to pursue you criminally.
Most people never see this coming becuase of how referrals work. Maybe you had a civil audit. Your revenue agent was calling every week, asking for documents, scheduling appointments. Then suddenly - silence. The calls stop. The emails stop. Most people feel relief. They think the IRS lost interest or moved on.
They shouldnt feel relief. That silence is often the sound of your case being referred to Criminal Investigation.
Behind the scenes, theres a three-stage escalation process. Stage one is your civil audit. Stage two is the auditor consulting with their group manager and then contacting a Fraud Enforcement Advisor. Stage three is a formal criminal referral to IRS-CI. The silence you thought was good news? That was stage two happening.
Other warning signs: Your bank notifies you that CID subpoenaed your records. Third parties - employees, business associates, family members - get contacted by IRS agents asking questions about you. Your auditor starts requesting unusual documents: supplier invoices, price lists, customer ledger cards. Questions shift from "what happened" to questions about your knowledge and intent.
- $10.59 billion in financial crimes identified - a 15.7% increase from FY24
- $4.5 billion in tax fraud specifically - up 111.8% from the prior year
- 25% increase in search warrants executed
- 14% increase in prosecution referrals to the Department of Justice
There getting more aggressive, not less.
The conviction rate is what matters most. In FY24, IRS-CI achieved a 90% conviction rate. For adjudicated cases over FY22-24, the conviction rate was 97.3%. This isnt like state court. When IRS Criminal Investigation decides to prosecute, the odds are overwhelmingly against the defendant.
And the sentences aren't theoretical maximums. In FY24, convicted defendants recieved average sentences of 27 months in federal prison. Over the FY22-24 period, the average was 37 months. Real prison time. Real federal facilities.
Consider actual cases from IRS-CI's top 10 of 2025. Elizabeth Gutfahr, the treasurer of Santa Cruz County in Arizona - 120 months federal prison, $51.8 million in restitution. She embezzled approximately $38.7 million over 12 years. Mark Francis Davidson, an Iowa businessman - 18 months federal prison. He diverted $3.8 million from his corporation to himself and didnt report it. Beatriz Toledo, a tax preparer in Florida - 57 months federal prison, $20 million restitution.
These arent hypotheticals. These are people who faced IRS-CI investigations and are now serving federal sentences.
The charge stacking makes it worse. Tax fraud cases rarely involve just one charge. Tax evasion under 26 USC 7201 carries up to 5 years. Filing false returns under 26 USC 7206 carries 3 years. But when money moved through bank accounts, you might face wire fraud charges under 18 USC 1343 - thats 20 years. Money laundering under 18 USC 1956 - another 20 years. FBAR violations for unreported foreign accounts - 10 years. One tax investigation can create theoretical exposure exceeding 40 years.
What to Do in the First 60 Seconds
This is the most critical part. And your instincts will be wrong.
Don't explain anything.
When IRS special agents show up, every instinct says to cooperate. Explain. Show them you have nothing to hide. Clear up the misunderstanding. This is exactly the wrong approach.
You have constitutional rights that protect you. The Fifth Amendment protects your right to remain silent. You cannot be compelled to give testimony against yourself. This right applies whether or not the agents have read you Miranda warnings. The Sixth Amendment protects your right to counsel. You have the right to have an attorney present during questioning. They cannot proceed with questioning over your objection once you've invoked this right.
Heres the paradox most people dont understand. Every word you say to IRS special agents is potential evidence. They're not there to hear your side. They're there to gather information that supports the case they've already built over 12 to 24 months. If you say something misleading - even by accident, even an honest mistake - that can become a false statements charge. If you provide background context trying to be helpful, that context can become admissions.
One of the biggest mistakes people make is trying to "explain things away" on the spot. The special agents questions are specifically designed to gather evidence. That casual question about your business expenses? Evidence. That clarification about where certain funds went? Evidence. That explanation of why you did something a certain way? Evidence.
What you should say:
- "I want to speak with an attorney before answering any questions."
That's it. Don't explain why you want an attorney. Don't apologize for not cooperating. Don't promise you'll talk to them later after you've consulted counsel. Don't provide any background or context. Just that one sentence.
Special agents are supposed to warn you "in clear and unequivocal terms" of your right to remain silent, that any statements can be used as evidence against you, and your right to request an attorney. Even if they don't give this warning - you still have these rights. Exercising them is not evidence of guilt. It's constitutional protection.
And understand this: anything you say without counsel present can still be used against you even if you hire an attorney later. You cannot unsay what you've already said. The protection only works if you invoke it before speaking.
When You're Ready
Todd Spodek has defended clients facing IRS Criminal Investigation cases. He understands the difference between civil tax matters where resolution is possible and criminal investigations where federal prison is on the table. The strategy is completely different depending on where you are in the process.
If IRS-CI has contacted you - at your business, at your home, anywhere - Spodek Law Group can help you understand exactly what you're facing and what options exist.
The consultation is free. There's no obligation.
What we evaluate: Has the case been referred to DOJ for prosecution, or is it still at the investigation stage? What evidence do they likely have? Are there any civil resolution possibilities left? What are realistic outcomes - not best-case fantasies, but actual possibilities based on how these cases play out in federal court?
Call us at 212-300-5196. The earlier you call, the more options exist. Once statements are made, once documents are provided, once the case moves to prosecution - leverage disappears. The window for meaningful defense work is narrow.
Don't wait until federal agents come back with an arrest warrant.
Were here when you need us.
