IRS Investigations: False Filing & Fabricated Deductions
An IRS criminal investigation can completely derail your business, freeze your personal assets, and threaten your absolute freedom before you ever step foot inside a courtroom. The IRS Criminal Investigation Division (IRS-CI) does not look at simple math errors or late filings as criminal acts. Instead, they launch high-stakes federal investigations when they believe a business owner, contractor, or professional tax preparer intentionally used fabricated information to cheat the system.
At Pissetzky Law LLC, we defend individuals and businesses facing severe federal tax fraud audits and indictments across Northbrook, Chicago, and the surrounding suburbs. Lead attorney Gal Pissetzky brings more than 25 years of aggressive federal trial experience to the table, representing clients inside the Dirksen Federal Building. We do not negotiate from a position of weakness; we proactively build trial-ready strategies to protect your career, wealth, and liberty.
The Reality of Fabricated Deductions and False Filings
Falsifying information on a tax return crosses the legal line from a civil audit mistake into a major federal felony. Under federal law (26 U.S.C. § 7206), it is a crime to willfully sign any return or document under the penalties of perjury that you do not believe to be true and correct in every material matter.
Federal prosecutors aggressively target common schemes involving:
- Inventing imaginary business expenses or write-offs to lower taxable income
- Fabricating charitable donations, receipts, or corporate mileage logs
- Underreporting cash revenue or offshore corporate accounts
- Preparing and filing fraudulent returns for clients as a professional tax preparer
A conviction under this statute can carry up to 3 years in federal prison per tax year, staggering financial penalties, and a permanent felony record. Our defense team steps in early to audit the government’s forensic accounting data, challenge their calculation of tax loss, and fight to stop a civil audit from turning into a criminal indictment.
Frequently Asked Questions About IRS Tax Fraud Investigations
Q: What is the difference between an honest tax mistake and criminal IRS tax fraud?
A: It entirely comes down to intent. The IRS knows that tax codes are incredibly complicated, and making an honest error, using the wrong form, or failing to keep perfect receipts is treated as simple negligence. Negligence can result in civil fines, but it will not land you in prison. Criminal tax fraud occurs when a person willfully and intentionally fabricates information—like inventing fake business expenses, creating false receipts, or lying about income – specifically to trick the government and lower their tax bill.
Q: Can I face federal felony charges if a professional tax preparer was the one who fabricated the information?
A: Yes, you can. Under federal law (26 U.S.C. Section 7206), when you sign your tax return, you are declaring under the penalties of perjury that everything inside that document is true and correct to the best of your knowledge. If you knew your preparer was fabricating fake deductions to get you a bigger refund, you can be charged with a felony. Conversely, if a crooked preparer altered your numbers without your knowledge, a preparer fraud defense can be built to isolate their criminal actions and protect you from liability.
Secure an Elite Federal Tax Defense
If you have received an IRS summons, a target letter, or suspect a civil audit has turned hostile, immediate action is required. Turn to Pissetzky Law LLC. Call our Northbrook office today at 312-239-8292 or contact us online to schedule a private, completely confidential case review.