San Jose 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 San Jose. Maybe the IRS sent a letter. Maybe federal agents showed up at your office. Maybe your accountant called with news about your stock options that made your stomach drop. Whatever brought you here, you need to understand something most people don't realize until it's too late.

San Jose sits in the heart of Silicon Valley, under the Northern District of California. Like all California cities, you face dual prosecution - federal AND California Franchise Tax Board with its nation-highest 13.3% tax rate. But San Jose faces something unique that Los Angeles and San Diego don't share. Tech industry expertise. NDCA prosecutors have spent decades investigating stock option backdating scandals, startup fraud, equity compensation schemes, and cryptocurrency violations. The forensic accounting techniques they perfected on billion-dollar tech company investigations? They apply those same skills to your unreported equity compensation.

Most people don't realize what made the Northern District of California one of the most sophisticated financial crimes prosecution units in America. It wasn't entertainment industry fraud like Los Angeles. It wasn't border district cartel investigations like San Diego. It was Silicon Valley. Stock option backdating. Startup founders hiding income. Executives manipulating equity compensation timing. Cryptocurrency tax evasion. The prosecutors who unraveled the biggest tech fraud cases in history? They're looking at your tax returns now. You're not facing prosecutors confused by ISOs and RSUs. You're facing prosecutors who learned their craft investigating the very companies that invented these compensation structures. If you're facing similar issues in other cities, see our guides on Los Angeles tax fraud lawyers, New York City tax fraud lawyers, or San Diego tax fraud lawyers.

The Dual Prosecution Reality

Heres the thing most people dont understand about tax fraud in San Jose. You face two separate prosecution threats that combine in devastating ways. The first threat is California itself. The California Franchise Tax Board has a 13.3% top marginal rate - the highest state income tax in America. That creates enormous incentive for California to pursue tax fraud aggressively. Every dollar you evade costs California 13 cents. They want that money back. And theyve built one of the most sophisticated state tax enforcement agencies in the country to get it.

The second threat is the Northern District of California. NDCA isnt like other federal districts. Its the Silicon Valley district. The prosecutors here spent decades investigating tech companies. Stock option backdating scandals that destroyed careers. Startup fraud that cost investors billions. Cryptocurrency schemes that tried to exploit regulatory confusion. The forensic accounting techniques they developed on those cases transfer directly to tax fraud investigation.

And heres were it gets devastating. These two threats work together. Federal prosecutors at NDCA coordinate with California FTB. They share information. They share witnesses. They share evidence. When one agency finds something, both agencies benefit. Your trying to hide from two sophisticated enforcement systems that talk to each other constantly. Any discrepancy between your federal and state returns becomes evidence of fraud. Any inconsistency triggers both investigations.

The math is brutal. Federal tax evasion: up to 5 years per count. California tax fraud: up to 4 years for felony tax evasion. Sentences can run consecutively. Combined with Silicon Valley prosecution expertise that catches schemes other districts would miss. You face California's aggressive prosecution appetite backed by investigators who learned there craft on the most sophisticated financial frauds in tech history. Its the worst possible combination for a tax fraud defendant.

California's 13.3% Tax Rate and the FTB

California's 13.3% top marginal income tax rate isnt just a number. Its a statement of priorities. That rate - the highest in America - means California has more at stake in every tax fraud case then any other state. When you evade taxes in California, your not just cheating the IRS. Your cheating a state that needs that revenue and will fight to get it back. The California Franchise Tax Board has built one of the most aggressive tax enforcement operations in the country.

The FTB doesn't just audit. They investigate. They have dedicated criminal investigation units. They coordinate with federal authorities. They pursue residency audits aggressively - tracking down California residents who claim to have moved to Nevada or Texas while still earning California income. And when they find fraud, they refer cases to the California Attorney General for criminal prosecution. State charges. State trial. State prison. All separate from whatever the federal government decides to do.

And heres the part that catches people off guard. California dosent let you go easily. If you leave California for a lower-tax state - Nevada, Texas, Washington - the FTB will audit your departure. They look for any evidence you still have ties to California. Property. Business interests. Your startup that hasnt gone public yet. Time spent in-state. If they conclude your still a California resident despite your claims, you face back taxes, penalties, interest, and potentially criminal charges for filing false returns. California follows former residents for years.

The FTB shares information with the IRS through coordinated enforcement programs. When they audit your California return, that information goes to federal authorities. When the IRS audits your federal return, California learns about it. These agencies work together. The fiction that you can hide from one while satisfying the other is exactly that - fiction. In San Jose, your facing two coordinated adversaries, not two seperate problems.

Northern District of California: Tech Industry Expertise

Most people only think about the IRS when they think about tax fraud prosecution. Thats a mistake that destroys lives. The Northern District of California didnt become expert in financial crimes by investigating drug cartels or entertainment fraud. They became expert investigating Silicon Valley. Stock option backdating. Startup accounting fraud. Executive compensation schemes. Cryptocurrency manipulation. The complex financial instruments that define the tech industry.

Think about what that means for your case. NDCA prosecutors have spent decades following money through stock option exercises. They understand qualified vs. disqualifying dispositions. They know how ISO and RSU taxation works. They know when capital gains treatment is legitimate and when its fraud. They know how startup founders hide income through corporate structures. The prosecutors who investigated the biggest backdating scandals? There looking at your equity compensation now.

The SEC and NDCA coordinate constantly. Securities fraud intersects with tax fraud when executives manipulate compensation timing. When stock options are backdated, theres both securities fraud and tax fraud. NDCA prosecutors understand this intersection becuase theyve spent careers prosecuting it. If your tax fraud involves equity compensation, your facing prosecutors who have seen every variation of every scheme.

And heres the part most people miss. NDCA selects cases carefully. The district serves nearly 9 million people across the Bay Area. 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.

Silicon Valley Tax Fraud: Stock Options and Equity Compensation

San Jose isnt just another California city. Its the capital of Silicon Valley. Over 300 publicly traded companies operate in the Northern District. Apple. Google. Meta. Nvidia. Intel. Cisco. And thousands of startups hoping to join them. The concentration of equity-based compensation creates unique tax fraud exposure that you wont find in most other cities.

Equity compensation fraud is a serious focus for NDCA prosecutors. Engineers who exercise stock options and forget to report the income. Founders who manipulate vesting schedules. Executives who time option exercises to minimize taxes illegally. When your tax fraud involves equity compensation, the investigation capabilities multiply. Your not just facing IRS-CI. Your potentialy facing coordinated investigations with the SEC, the FBI Financial Crimes unit, and California regulators. The exposure compounds exponentialy.

And then theres cryptocurrency. Silicon Valley has become the center of the crypto industry. Bitcoin. Ethereum. Thousands of altcoins. The tax treatment of cryptocurrency is genuinly complicated. But complicated dosent mean immune from prosecution. NDCA prosecutors have developed sophisticated blockchain analysis capabilities. They can trace cryptocurrency transactions that most people think are anonymous. The idea that crypto is untraceable is a myth that sends people to federal prison.

The small business owner thinks there safe becuase there not a tech executive. Wrong. NDCA prosecutes tax fraud across the entire economic spectrum. Restaurant owners. Contractors. Service businesses. The skills they developed investigating Fortune 500 tech companies work equally well on your unreported income. Scale dosent matter. Sophistication dosent matter. What matters is wheather they can prove the case - and if your on there radar, they already think they can.

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 stock options? Evidence. The detailed explainations you gave about your equity compensation? Admissions. The questions you answered honestly about your crypto trades? 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 startup CFO 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 San Jose, this audit-to-criminal pipeline exists at both federal AND state levels. An IRS audit can trigger federal prosecution. A California FTB audit can trigger state prosecution. Both agencies share information. What you tell one becomes evidence for both. Inconsistencies between your federal and California returns become proof of intentional fraud. Two agencies. Two sets of investigators. Two potential prosecutions.

Federal Tax Fraud Penalties in California

Federal tax evasion under 26 USC 7201 carries up to 5 years in prison per count. Thats the starting point. But California tax fraud penalties stack on top of federal penalties, not instead of them. California tax evasion can result in up to 4 years in state prison. Fines up to $50,000 for individuals. And these penalties are on top of whatever the federal government imposes.

OK so heres were the math gets scary. Federal conviction: 5 years per count. California conviction: up to 4 more years. Sentences can run consecutively. You serve one, then you serve the other. Add multiple counts on each side, and your looking at combined exposure that can exceed a decade. And federal sentences are served at 85% minimum - no early release for good behavior. When the federal government says five years, they mean at least four years and three months.

Fines for federal tax evasion can reach $100,000 for individuals and $500,000 for corporations. California adds its own fines. Plus restitution to both jurisdictions - every dollar you allegedly evaded from federal AND state, with interest and penalties. The financial destruction can be total. Liens on your home. Seizure of bank accounts. Garnishment of future income. Forfeiture of unvested stock options. Even if you somehow avoid prison, the financial consequences can follow you for the rest of your life.

And dont think bankruptcy will save you. Tax debts are extremly difficult to discharge in bankruptcy. Both federal and California collection rights survive Chapter 7, survive Chapter 13, survive virtually everything. Once you owe the IRS and California, you owe them basicly forever. The only way out is to pay - or to fight the charges before conviction happens.

Signs Your Already a Criminal Target in San Jose

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 brokerage statements, traced your stock option exercises, and concluded that you probably commited a crime.

Heres the thing about Special Agents in San Jose. They have access to the sophisticated financial investigation tools that NDCA developed for tech industry crimes. They understand equity compensation. They know how to analyze stock option exercises. They can trace cryptocurrency transactions. If your in San Jose and an IRS-CI agent shows up, there bringing capabilities refined on billion-dollar tech fraud investigations. Your complicated equity compensation dosent confuse them. Your crypto holdings dont impress them. Theyve seen it all before.

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 company's CFO. Immediatly. Every minute you spend talking to a Special Agent 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 brokerage records. Interviewing your accountant. Talking to your companys HR department about your equity compensation. Seizing documents. Freezing bank accounts. Building there case. Your financial life 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 heres the part most people dont think about. Your family members can be brought in for questioning. Your spouse can be subpeonaed. Your business partners 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 corporate lawyer. Someone who handles federal tax crimes exclusivly. Someone who understands IRS-CI, the Northern District of California, and tech industry prosecution. Someone whos been in the trenches. This is the one window were intervention can change everything.

Why You Need a San Jose 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, Northern District prosecutors, and California state prosecution. We understand the unique double threat your facing in San Jose - where California's aggressive enforcement combines with Silicon Valley prosecution expertise to create one of the most challenging prosecution environments in America. 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 tech workers who thought they could handle it themselves and ended up in federal prison.

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 your brokerage statements. 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 Northern District prosecutors think. We know how California 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.

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