New York City 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 New York City. Maybe the IRS sent a letter. Maybe agents showed up at your business. Maybe your accountant called with bad news. Whatever brought you here, you need to understand something most people don't realize until it's too late.

Tax fraud in New York City isn't like tax fraud anywhere else in America. You're not dealing with one agency. You're being hunted by three separate governments, and each one can send you to prison independently. IRS Criminal Investigation, the U.S. Attorney's Office for the Southern District of New York, and the New York State Department of Taxation and Finance. Each has its own prosecutors, its own conviction metrics, and its own reasons to want your case. The IRS Criminal Investigation division has a 90% conviction rate - not because they're lucky, but because they only bring cases they're certain they'll win. When they open a file on you, they've already decided you're going to prison. The trial is a formality.

Most people think "double jeopardy" protects them from being prosecuted twice for the same thing. It doesn't. Federal and state governments are separate sovereigns under the Constitution. They can prosecute you for the exact same conduct, on the same facts, without violating your rights. This is called the dual sovereignty doctrine, and it's not a loophole - it's the law. Federal tax evasion carries up to 5 years per count. New York State criminal tax fraud in the first degree carries up to 25 more. That's 30 years of combined exposure before anyone even starts negotiating. And in New York City, both prosecutors want high-profile cases. You're not just a defendant. You're a career opportunity for ambitious lawyers on both sides.

The Three Prosecutors Who Want Your Case

Heres the thing most people dont understand about tax fraud in NYC. Your not dealing with one investigation - your dealing with three seperate ones that can all run at the same time. IRS Criminal Investigation handles federal tax crimes. The SDNY U.S. Attorneys Office prosecutes those cases in federal court. And New York State has its own criminal tax fraud statutes that operate completly independently of everything else.

Think about what that means. The federal government can investigate you, charge you, convict you, and send you to prison. Then New York State can do the exact same thing. Seperate charges, seperate trial, seperate sentence. And none of it violates double jeopardy becuase there "different sovereigns." Its not a bug in the system. Its how the system was designed.

The Southern District of New York is called the "Sovereign District" for a reason. They act like there own government. SDNY prosecutes more financial crimes then any other federal district in the country, and they have a reputation for being absolutly ruthless. If your tax fraud touches New York City - if you live here, work here, or your business operates here - SDNY wants your case. They dont care wheather your a small business owner or a multinational corporation. They care about convictions. There measured on convictions. There careers depend on convictions.

Heres something else most people dont realize. Each of these three agencies has seperate metrics they have to hit:

• IRS-CI is measured on prosecutions and conviction rates
• SDNY is measured on convictions and sentencing outcomes
• NY State wants to recover lost revenue and send a message

None of them are coordinating to help you. There not talking to each other about giving you a break. There all competing to make an example out of you. Thats the system your walking into.

And heres were it gets really bad. New York State has a 20-year statute of limitations for tax debt collection. The IRS only has 10 years. So even if you somehow survive the federal prosecution, even if you serve your time and pay your federal debt, New York State can keep coming after you for another decade. The state never forgets. The state never forgives. And the state never stops collecting.

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 prosecution's file:

• The helpful documents you provided? Evidence.
• The detailed explainations you gave? Admissions.
• The questions you answered honestly? 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. Every conversation you had, every document you shared, every strategy you discussed - all of it can come out in court. The IRS can subpeona your accountant. The prosecutor can put your accountant on the witness stand. Everyone you talked to about your taxes becomes a potential witness for the government. The person you hired to help you can become the governments star witness against you.

And its not just your accountant. Its your bookkeeper. Your financial advisor. Your business partner. Your spouse. Anyone who knows anything about your tax situation can be compelled to testify. The prosecution dosent need your permission. They have subpeona power. And once someone starts talking to federal investigators, they tend to keep talking becuase the alternative is facing there own obstruction charges.

The Five Degrees of Tax Fraud in New York

Most people focus on federal tax charges becuase thats what they hear about on the news. Martha Stewart. Wesley Snipes. The big celebrity cases. But New York has its own criminal tax fraud statutes - completly seperate from federal law - with FIVE different degrees of severity. Tax Law sections 1802 through 1806. Each one is a different crime with different elements and different penaltys.

The degrees break down as follows:

• Fifth degree (§1802): Class A misdemeanor - up to 1 year in jail
• Fourth degree (§1803): Class E felony - up to 4 years
• Third degree (§1804): Class D felony - up to 7 years
• Second degree (§1805): Class C felony - up to 15 years
• First degree (§1806): Class B felony - up to 25 years

Heres the part nobody warns you about. First degree tax fraud - 25 years - is MORE then federal tax evasion, which maxes out at 5 years per count. The state charges can be worse then the federal charges. And state time can run CONSECUTIVE to federal time, not concurrent. You serve one sentence, then you serve the other. Thats not double jeopardy. Thats just how dual sovereignty works.

The degree depends on the amount of tax fraud. Fifth degree is any tax fraud act. Fourth degree kicks in at $3,000 in unpaid taxes over a year. Third degree is $10,000. Second degree is $50,000. First degree kicks in at $1 million in unpaid taxes. Plus fines up to $100,000 or double the underpayment, whichever is greater. If you owe significant NYC taxes, state charges are coming. The question isnt wheather NY State will prosecute - its what degree they'll charge you with.

And heres something else. NY Tax Law 1801 defines what constitutes a "tax fraud act." Its broader then you think. Filing a false return. Failing to file a required return. Supplying false information. Making fraudulent statements. Basically anything related to taxes that involves dishonesty. The statute was designed to be comprehensive, and prosecutors use every inch of it.

Signs Your Already a Criminal Target

When IRS contacts you, the type of agent matters more then anything else. Revenue Agent means civil audit - you still have time to prepare, options are still open, your not necesarily in criminal jeopardy. 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 even 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. IRS Criminal Investigation was founded in 1919, and these agents are federal law enforcement officers with full arrest power.

Heres the thing about Special Agents. They only show up when they beleive they have a case. IRS-CI dosent waste resources on investigations they dont think will lead to convictions. By the time a Special Agent knocks on your door, theyve already reviewed your returns, analyzed your bank records, interviewed witnesses, and concluded that you probably commited a crime. The visit isnt the beginning of the investigation. Its the end of it. There just collecting the final pieces.

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. And Special Agents are trained to ask questions in ways 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 a Special Agent without counsel is a minute your making your situation worse.

Real NYC Tax Fraud Cases That Destroyed Lives

Think tax preparers are to small to prosecute? ALVAREZ ran a tax preparation business in the Bronx. Just a neighborhood tax prep shop, the kind you see on every corner. Helped working-class families file there returns. Nothing glamorous. Nothing high-profile. But the operation generated $12 million in fraudulent proceeds over the course of the scheme. Now serving federal prison time. The feds didnt care that ALVAREZ was a small operator. They cared that the fraud was proveable and the conviction was guaranteed.

Maybe you think sophisticated schemes avoid detection. Frank Butselaar was an international tax advisor - someone who spent there entire career understanding tax law, helping clients structure there affairs, navigating complex cross-border issues. Professional expertise. Years of experience. Deep knowledge of how the system works. Pleaded guilty in late 2024, sentenced to 30 months in federal prison in 2025. Professional expertise didnt save him. Knowing the system didnt protect him. The system caught him anyway.

Heres what these cases have in common. Everyone thought they were to smart or to small to prosecute. "They wont come after me." "I'm not a big enough fish." "My situation is different." "I know how this works." IRS-CI has a 90% conviction rate for a reason - they only bring cases there certain to win. If your reading this because agents contacted you, your already on there radar. The question isnt wheather your going to be investigated. The question is what you do about it.

And dont think your protected becuase your just a "regular person." The DOJ publicizes these cases specificaly to send a message. Every conviction is a press release. Every sentencing is a deterrent. They WANT you to read about ALVAREZ and Butselaar. They want you to be scared. And you should be - but you should also be taking action.

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:

• Interviewing your employees
• Talking to your vendors
• Questioning family members
• Seizing documents
• Freezing bank accounts
• Issuing subpeenas
• 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. Witnesses have been interviewed. Statements have been made. Evidence has been secured. The prosecution's case is half-built before you even hire a lawyer.

And heres the part most people dont think about. Your family members can be brought in for questioning. Your spouse can be subpeonaed. Your adult children can be interviewed. Anyone who might know anything about your finances can be compelled to talk. And what they say becomes evidence. Not just against you - potentialy against them too. Tax fraud investigations have a way of expanding to include everyone in orbit.

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 cousin who passed the bar. Someone who handles federal tax crimes exclusivly. Someone who understands IRS-CI, SDNY, and NY State prosecution. Someone whos been in the trenches. This is the one window were intervention can change everything - were the right lawyer can sometimes prevent charges entirely.

Why You Need a Tax Fraud Lawyer NOW

Your reading this because something happened. An agent visit. A letter. A subpoena. 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, SDNY, and NY State prosecution. We understand the triple threat your facing because 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 business owners who thought they could handle it themselves and ended up in federal prison. We've seen what the system does to people who dont take it seriously.

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 reviewing documents. 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 90% rate.

We've been doing this for years. We know how IRS-CI builds cases. We know how SDNY prosecutors think. We know how NY State pursues tax fraud charges. 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.