Tax Preparer Investigation Defense for IRS-Ci Cases

A civil examination may address return accuracy, due diligence, and penalties under IRC §§6694 and 6695. IRS Criminal Investigation (IRS-CI), by contrast, investigates suspected tax crimes and may refer evidence for federal prosecution.

Civil and criminal inquiries can concern the same returns, sometimes at the same time. But a civil penalty does not establish a federal crime. Assessments or administrative disputes may call for a separate tax controversy review.

Investigators may compare returns filed by one preparer or business for recurring business expenses, fuel-tax credits, asset-sale losses, refund claims, or filing-status positions. Similar entries across clients may prompt questions, not prove fraud.

The relevant records show where each figure came from, who asked follow-up questions, what changed before filing, and who approved or transmitted the return.

An interview request also does not establish whether agents view someone as a witness, subject, or target. Investigative status can change.

IRC §7206(2) prohibits willfully aiding, assisting, procuring, counseling, or advising the preparation or presentation of a tax return or other covered document that is fraudulent or false as to a material matter.

Willfulness generally means a voluntary, intentional violation of a known legal duty. The government must connect the preparer's conduct to the materially false statement and prove willfulness beyond a reasonable doubt. Unlike tax evasion under IRC §7201, a §7206(2) conviction does not require proof of an additional tax deficiency.

The statute applies even when the taxpayer was unaware of the false information or did not consent to it. Equally, a client's inaccurate statement does not establish the preparer's guilt.

Intake documents, source records, emails, and review notes help determine what the preparer knew and did. Those distinctions matter in criminal tax defense.

IRC §6694(a) covers certain unreasonable positions that understate tax liability. Section 6694(b) addresses willful attempts to understate liability and reckless or intentional disregard of rules or regulations.

Separate provisions govern certain due-diligence failures, and IRC §7407 permits court injunctions in qualifying cases.

These civil remedies apply under standards distinct from §7206(2). An assessed preparer penalty, an EFIN restriction, or professional discipline does not by itself satisfy the willfulness element of a criminal charge.

A disputed Schedule C expense has a different evidentiary history when the client supplied invoices than when an employee entered an unsupported amount.

For Forms 4136 and 4797, fuel-use records and asset-transaction documents can be tested against the figures reported.

Client-provided information is not an automatic defense. Its significance depends on whether the preparer had reason to question it, sought clarification, knowingly changed the information, or fabricated supporting entries.

Form 8867 covers specified benefits: the earned income credit (EITC), child tax credit and additional child tax credit (CTC/ACTC), credit for other dependents (ODC), American opportunity tax credit (AOTC), and head-of-household filing status.

It is not a universal checklist for fuel-tax credits or disputed business deductions.

Engagement letters, questions to clients, document requests, review notes, and e-file histories also clarify responsibility.

In a firm with multiple preparers, distinguish the acts of the owner, employee, reviewer, manager, and outside contractor rather than assuming everyone had the same knowledge.

A voluntary interview is not the same as a summons, subpoena, or search warrant.

Before responding, identify the issuing authority, tax years, custodians, records sought, and applicable deadline. A preparer may have Fifth Amendment concerns about testimony, but that does not make every records demand optional.

Preserve original client files, communications, workpapers, and access logs. Deleting or revising records after investigators make contact can create separate problems. Also consider whether the firm and an individual preparer need separate attorneys because their interests differ.

IRC §7216 generally restricts unauthorized disclosure or use of client tax-return information. Treasury regulations allow certain disclosures, including to IRS personnel, to an attorney for legal advice, and under specified legal demands.

These exceptions do not resolve whether a particular demand is valid or whether another privilege applies.

IRC §7525 does not provide a general privilege in criminal tax matters. It protects specified communications only in qualifying noncriminal tax proceedings.

Broader white collar investigations issues may arise when agents interview employees or federal prosecutors become involved.

Before indictment, the relevant review compares the questioned entries with information available at the time of preparation. It also identifies potentially inconsistent client accounts, changes to filed returns, and which people had access to the electronic filing system.

On October 9, 2026, the U.S. Attorney's Office for the Eastern District of New York announced that tax preparer Frantzson Saintilien had been convicted on all 18 counts after trial.

The prosecution involved false fuel-tax credits, business expenses, and asset-sale losses reported on Forms 1040, 4136, 4797, and Schedule C.

The verdict concerns that prosecuted case; it neither establishes fraud in another preparer's returns nor predicts the outcome of a pending investigation.