Seattle 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 Seattle. 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.

Seattle sits in Washington state - one of only nine states with NO state income tax. People move here specifically to escape state income tax. Tech workers relocate from California to avoid that 13.3% hit. Amazon, Microsoft, and the entire tech ecosystem thrives partly because of this tax advantage. But here's what makes Seattle uniquely dangerous for tax fraud: when there's no state income tax, the IRS has your UNDIVIDED attention. Federal prosecutors don't coordinate with a state tax agency. They don't wait for state investigators. They don't share cases or resources. 100% federal focus. And the Western District of Washington has developed extraordinary expertise in exactly what Seattle generates - tech compensation fraud, cryptocurrency schemes, stock option manipulation. If you're facing similar issues in other cities, see our guides on Portland tax fraud lawyers, San Francisco tax fraud lawyers, or Denver tax fraud lawyers.

Most people think no state income tax means less government attention. They're dangerously wrong. In states with income tax, you face dual prosecution exposure - federal AND state agencies both investigating, both potentially charging. That's scary, but it also means the federal government shares your case. In Seattle, the federal government doesn't share anything. Your case is 100% theirs. All resources. All attention. All the time in the world to build an overwhelming case against you.

The No State Tax Reality

Heres the thing most people dont understand about tax fraud in Seattle. Washington has no state income tax. None. Zero. You dont file a state return. You dont pay state income tax on your tech salary, your stock options, your RSU vesting, your cryptocurrency gains. People celebrate this. They move here from high-tax states thinking theyve escaped. But they dont understand what no state income tax really means for tax fraud prosecution.

In California or New York, tax fraud creates dual prosecution exposure. Federal prosecutors AND state prosecutors both interested. Both investigating. Both potentially charging. Thats scary - but it also creates seperation. Different offices. Different priorities. Different negotiations. Sometimes you can work with one side to affect the other. Thats leverage.

But in Seattle? You face only the federal government. And when the federal government is your only adversary, they dont share attention with anyone. The IRS doesnt coordinate with a state agency that might have different priorities. They dont wait for state investigators to complete there work. They dont factor in what a state prosecution might achieve. There 100% focused on you. All resources. All attention. All the time in the world to build an overwhelming case.

And heres what makes it worse. The Western District of Washington sits in the heart of Americas tech industry. Amazon headquarters. Microsoft headquarters. Thousands of startups. Tens of thousands of tech workers earning substantial incomes through equity compensation. WDWA prosecutors have spent years developing expertise in exactly the kind of tax fraud that tech compensation creates. You think no state tax means safety. It actualy means undivided attention from prosecutors who specialize in your exact situation.

Tech Capital: Equity Compensation Traps

Seattle isnt just a city with tech companies. Its the headquarters of the tech compensation revolution. Amazon pioneered RSUs as primary compensation. Microsoft has offered stock options for decades. Every startup in the ecosystem offers equity. And equity compensation creates tax fraud exposure that traditional salary earners never face.

Heres were conventional wisdom fails completely. Most people think income is income. Your employer pays you, taxes get withheld, you file a return, everything matches. Simple. But tech equity compensation is fundamentaly different. Stock options have exercise dates, vesting schedules, and holding periods that determine tax treatment. RSUs create taxable income at vesting - income that doesnt come with traditional withholding. Restricted stock has 83(b) election windows that slam shut. Each complexity creates opportunities for mistakes - and mistakes the IRS treats as fraud.

Think about what happens with a typical Amazon employee. Salary income: straightforward, withholding covers it. RSU vesting: taxable income at the market price on vesting date. But what if you didnt understand RSUs were taxable at vesting? What if you thought you only owed tax when you sold? What if your accountant made the same assumption? The IRS sees the income - your employer reported it. Your return shows something different. Thats not a misunderstanding to federal prosecutors. Thats tax fraud.

And in Seattle, this tech compensation complexity faces undivided federal attention. No state agency pulling resources. No competing jurisdiction. Just IRS Criminal Investigation and WDWA prosecutors who have seen every equity compensation mistake and know exactly how to prosecute it.

OK so heres were the math gets terrifying. Say your RSU vesting created $400,000 in taxable income over three years - income you didnt properly report because you thought tax was due at sale. Federal tax loss: maybe $140,000 in unpaid taxes. Thats not a civil penalty situation. Thats criminal tax evasion territory. And in Washington state, theres no state prosecution to share the case with, no coordination requirements that slow things down. The federal government has your undivided attention, and they use it.

Cryptocurrency: The Permanent Record

Seattle has one of the highest cryptocurrency adoption rates in America. Tech workers who understand blockchain. Early adopters who made fortunes. Engineers who were paid in Bitcoin before it was mainstream. And cryptocurrency creates tax fraud exposure that most people catastrophicaly underestimate.

Heres the misconception that destroys people. They think cryptocurrency is anonymous. Untraceable. Private. The government cant see it. They couldnt be more wrong. The blockchain is a permanent public record of every transaction ever made. Every Bitcoin movement, every Ethereum transfer, every exchange - recorded forever. And the IRS has spent years developing tools to trace cryptocurrency through wallets, exchanges, and conversion points.

Every major cryptocurrency exchange now reports to the IRS. Coinbase, Kraken, Gemini - they all file information returns when you sell, exchange, or receive cryptocurrency. The IRS gets records of your transactions even if you never told them. When your tax return doesnt report cryptocurrency gains that the exchange already reported, you become a target. Not maybe. Automaticly.

And heres the part that makes Seattle particularly dangerous. Tech workers here often recieved cryptocurrency as early compensation. Bitcoin when it was $500. Ethereum when it was $10. They held for years. Then they sold at massive gains - gains that created enormous tax obligations. But they thought crypto was different. Private. Untraceable. They didnt report. Now the IRS has exchange records, blockchain analysis, and bank deposit information showing exactly what happened.

In Washington state, theres no state tax agency that might investigate cryptocurrency seperately. Federal prosecutors have exclusive jurisdiction. And WDWA has developed specific expertise in cryptocurrency fraud because Seattle produces so much of it. The combination of tech sophistication and early crypto adoption created a population that the IRS is now systematicaly pursuing.

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 RSU vesting? Evidence. The detailed explainations you gave about your cryptocurrency trades? Admissions. The questions you answered honestly about your stock option exercises? 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 employer can be subpeonaed about your equity compensation. Coinbase can produce every transaction in your account. Everyone you talked to about your finances becomes a potential witness for the prosecution.

And in Seattle, this audit-to-criminal pipeline runs without state coordination delays. No waiting for state investigators to finish there part. No coordinating with a state prosecutors office. Just IRS-CI and WDWA prosecutors moving as fast as they want, with no external constraints on there timeline. When you have there undivided attention, they use it.

Federal Tax Fraud Penalties

Federal tax evasion under 26 USC 7201 carries up to 5 years in prison per count. Thats the starting point. In states with income tax, state penalties stack on top. In Washington, there are no state penalties - but dont think that makes it better. It just means federal prosecutors dont have to consider what a state prosecution might achieve. They pursue the maximum federal exposure without any coordination concerns.

Tax evasion: 5 years per count. Filing false returns: 3 years per count. Wire fraud: 20 years per count. Money laundering: 20 years per count. Cryptocurrency fraud can trigger additional charges. Securities fraud if your equity compensation involved public company stock. The exposure compounds when your income involves tech compensation and digital assets.

Heres were the math gets terrifying. Federal tax evasion: 5 years per count. Wire fraud in connection with cryptocurrency: 20 years per count. 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.

Fines for federal tax evasion can reach $100,000 for individuals and $500,000 for corporations. Plus restitution - every dollar you allegedly evaded, with interest and penalties. Plus forfeiture of property involved in or derived from the crime. Your cryptocurrency holdings. Your stock. Your real estate. Your bank accounts. The financial destruction can be total.

And in Washington state, theres no state prosecution that might achieve partial accountability. Federal prosecutors determine 100% of your exposure. They set the charges. They control the plea negotiations. They decide wheather to pursue maximum penalties. No state AG to negotiate with seperately. No divided authority to exploit.

Signs Your Already a Criminal Target in Seattle

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 equity compensation records, traced your cryptocurrency transactions, and concluded that you probly commited a crime.

In Seattle, watch for tech-specific warning signs. Questions about RSU vesting that seem unusualy detailed. Requests for brokerage statements showing stock option exercises. Inquiries about cryptocurrency holdings across multiple exchanges. Questions about the timing of your equity sales. The IRS has become sophistcated about tech compensation - they know the traps and they know how to catch people who fell into them.

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 bank records. Pulling your brokerage statements. Getting your employer's equity compensation records. Serving Coinbase and every other exchange with document requests. Interviewing your accountant. Talking to your financial advisor. Seizing documents. Freezing accounts. Building there case. Your finances are being reconstructed while you try to figure out whats happening.

And in Seattle, federal agencies move without state coordination delays. No waiting for state investigators to finish there part. No coordinating with a state prosecutors office. Just IRS-CI and WDWA prosecutors moving as fast as they want, with no external constraints on there timeline. When you have there undivided attention, they use it.

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 Western District of Washington, and tech compensation investigations. Someone whos been in the trenches. This is the one window were intervention can change everything.

Why You Need a Seattle 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, Western District of Washington prosecutors, and the unique challenges of tech compensation and cryptocurrency fraud. We understand the exceptional threat your facing in Seattle - where no state income tax means the federal government has your undivided attention, and where tech industry expertise means they understand your equity compensation better than you do. 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 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 pulling your brokerage records. There tracing your cryptocurrency transactions. There reconstructing your equity compensation history. 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 Western District of Washington prosecutors think. We know how tech compensation investigations develop. 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 federal government spends building there case against you - with nothing else competing for there attention. Make the call. Protect yourself. Protect your family. Protect your career. Because once the indictment comes down, protecting becomes much, much harder.