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A federal tax fraud investigation places your finances, business, professional reputation, and personal freedom at risk. For New York City business owners, corporate executives, investors, real estate professionals, and high-net-worth individuals, tax fraud allegations often involve complex financial transactions, multiple entities, international accounts, and years of financial records.
The IRS Criminal Investigation Division (IRS-CI) and federal prosecutors in the Southern District of New York (SDNY) and Eastern District of New York (EDNY) have extensive resources to investigate suspected financial crimes. What begins as an IRS audit or an inquiry into a business transaction can escalate into a federal criminal prosecution.
Lowther | Walker represents New York City individuals and businesses facing complex federal criminal investigations and prosecutions, including allegations of tax fraud, tax evasion, wire fraud, and related financial crimes charges.
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Our practice focuses on complex Title 26 investigations and litigation directly involving IRS Criminal Investigation (IRS-CI) and the DOJ Tax Division.
We represent clients during high-risk audits, administrative summonses, and grand jury investigations to resolve tax matters civilly before formal criminal charges are filed.
We work alongside forensic accountants to scrutinize tax returns, offshore account structures, and the complex transactional evidence underlying the government’s tax loss calculations.
We build cohesive strategies to defeat primary tax evasion and false return allegations, alongside frequently intertwined federal charges such as wire fraud, money laundering, and conspiracy to defraud the United States.
Because every taxpayer’s financial footprint is unique, we develop custom defense strategies built around your specific tax history, business entity structure, and accounting practices.
Declined Medicare Fraud Prosecution When the government alleges $100 million in fraudulent Medicare reimbursements, the stakes are undeniably high. Recently, our firm successfully represented the former director of a national laboratory targeted by federal authorities […]
Fraud Charges Dismissed In US v. J.C., the DOJ targeted our client, a public official, for their alleged involvement in a conspiracy to fraudulently obtain over $1 million in pandemic subsidies and loans. We dismantled […]
Investigation terminated; no prosecution. DOJ notified our client that she was the target of a multi-million-dollar public corruption, money-laundering, and tax-fraud investigation that the FBI and IRS-CI were conducting. The client’s former attorney had arranged […]
The Department of Justice’s Criminal Division, Fraud Section charged our client and nine other individuals in a $1.4 Billion health care fraud, wire fraud, and money laundering conspiracy (the largest health care fraud case that […]
Declined Medicare Fraud Prosecution When the government alleges $100 million in fraudulent Medicare reimbursements, the stakes are undeniably high. Recently, our firm successfully represented the former director of a national laboratory targeted by federal authorities […]
Fraud Charges Dismissed In US v. J.C., the DOJ targeted our client, a public official, for their alleged involvement in a conspiracy to fraudulently obtain over $1 million in pandemic subsidies and loans. We dismantled […]
Investigation terminated; no prosecution. DOJ notified our client that she was the target of a multi-million-dollar public corruption, money-laundering, and tax-fraud investigation that the FBI and IRS-CI were conducting. The client’s former attorney had arranged […]
The Department of Justice’s Criminal Division, Fraud Section charged our client and nine other individuals in a $1.4 Billion health care fraud, wire fraud, and money laundering conspiracy (the largest health care fraud case that […]
Federal tax fraud generally involves intentionally providing false information to tax authorities, concealing taxable income, or taking deliberate steps to avoid paying taxes legally owed.
Tax-related offenses can involve individual income taxes, corporate taxes, employment taxes, partnership income, investment proceeds, and transactions involving domestic or foreign entities.
The distinction between an honest tax mistake and criminal tax fraud is critical. Federal prosecutors generally must establish willfulness, meaning that the defendant acted voluntarily and intentionally with knowledge that their conduct violated a known legal duty. An accounting error, misunderstanding of a complicated tax provision, or negligent bookkeeping does not automatically constitute criminal tax fraud.
However, the government may allege criminal intent when it identifies a pattern of conduct involving concealed income, fabricated records, false statements, or efforts to obstruct an investigation.
At Lowther | Walker, our federal defense attorneys examine the underlying financial transactions, the applicable tax obligations, and the evidence prosecutors intend to use to establish criminal intent.
New York City is home to two federal judicial districts with overlapping connections to complex financial investigations.
The Southern District of New York (SDNY) encompasses Manhattan, the Bronx, and several surrounding counties. The Eastern District of New York (EDNY) includes Brooklyn, Queens, Staten Island, and Long Island.
The business location, the defendant’s residence, the location of financial transactions, and the conduct under investigation may influence where federal prosecutors pursue charges.
For example, an investigation involving a Manhattan investment firm, a Wall Street executive, or a multinational corporation may fall within the jurisdiction of SDNY. A tax investigation involving a business headquartered in Brooklyn or Queens may be handled by EDNY.
However, jurisdiction is not determined solely by a company’s office location. Federal criminal jurisdiction can arise from conduct occurring across multiple districts, and the government may investigate transactions involving entities, financial institutions, and individuals in different locations.
IRS Criminal Investigation investigates potential criminal violations of the Internal Revenue Code and certain related financial crimes.
In New York City, federal tax investigations may involve:
An investigation may involve grand jury subpoenas, interviews with accountants and business associates, forensic examination of financial records, or the execution of search warrants.
The existence of an IRS audit or investigation does not establish criminal wrongdoing. A central question in a criminal tax case is whether the government can prove that the defendant knowingly and willfully violated the applicable law.
Lowther | Walker examines the government’s evidence, the applicable federal statutes, and the circumstances surrounding the alleged conduct to identify potential defenses.
Federal tax charges are not the only potential source of criminal liability in New York City.
New York State maintains its own criminal tax fraud statutes under Article 37 of the New York Tax Law. These provisions address conduct involving the intentional evasion of state and certain local taxes.
Under New York Tax Law § 1801, a criminal tax fraud act generally involves a willful act or omission undertaken with the intent to evade a tax obligation or defeat the administration of the state’s tax laws.
The severity of a criminal tax fraud charge depends, in part, on the amount of tax allegedly evaded.
New York’s criminal tax fraud classifications include:
| Tax Offense | Classification |
| Criminal Tax Fraud in the Fifth Degree | Class A misdemeanor |
| Criminal Tax Fraud in the Fourth Degree | Class E felony |
| Criminal Tax Fraud in the Third Degree | Class D felony |
| Criminal Tax Fraud in the Second Degree | Class C felony |
| Criminal Tax Fraud in the First Degree | Class B felony |
The amount of alleged tax evasion can determine which degree of criminal tax fraud prosecutors may charge. Under the statutory framework, the highest degree generally applies when the alleged evaded tax exceeds $1 million.
New York law also addresses repeated failures to file certain tax returns and other conduct that may result in separate criminal charges.
A critical defense issue is whether the evidence establishes intentional tax fraud or instead reflects a reporting error, accounting dispute, or misunderstanding of tax obligations.
The New York State Department of Taxation and Finance maintains a Criminal Investigations Division that investigates potential tax crimes and may refer matters for prosecution. These investigations can involve taxpayers, business owners, accountants, and tax preparers.
The fact that a taxpayer failed to file a return or owes money to the state does not, by itself, establish the elements of a criminal tax fraud offense. The specific statute, the nature of the conduct, and the evidence of intent must be examined.
New York City imposes tax obligations that are separate from federal and New York State income taxes. Businesses and residents may face additional scrutiny when financial records raise questions about city-specific tax liabilities.
The New York City Department of Finance investigates potential tax fraud involving several categories of taxes, including business taxes, personal income taxes, property taxes, and certain other city-administered taxes.
Individuals operating partnerships, sole proprietorships, and other unincorporated businesses may have obligations under New York City’s Unincorporated Business Tax, commonly known as UBT.
A self-employed professional, consultant, real estate operator, or business owner may face questions about whether the business properly reported income and filed applicable returns.
For example, a business operating from a New York City residence may need to account for city business tax obligations even when the owner primarily reports income through an individual federal tax return.
An alleged failure to file a city business tax return does not automatically constitute criminal fraud. Investigators must consider the taxpayer’s filing obligations, the nature of the business, and whether any failure was intentional.
Certain businesses operating in parts of Manhattan may be subject to New York City’s Commercial Rent Tax. The tax generally applies to qualifying commercial tenants south of 96th Street in Manhattan, subject to statutory exemptions, thresholds, and other requirements. Businesses with substantial commercial leases may face questions about whether they properly reported rent-related information and complied with applicable filing obligations.
A dispute over Commercial Rent Tax liability can involve lease agreements, rent payments, business records, and the location of commercial operations.
New York City residents may be subject to city personal income tax. Residency disputes can become particularly complex when individuals maintain homes in multiple states, travel extensively for business, or claim that they relocated outside the city.
The city may examine factors such as:
A taxpayer’s residency status depends on the applicable legal rules and the facts of the individual case.
Creating false documents or making intentionally false statements to conceal New York City residency can create additional legal exposure. However, simply maintaining a residence in another state does not establish tax fraud.
Defense counsel must distinguish legitimate residency disputes from allegations that a taxpayer deliberately falsified information to avoid city tax obligations.
New York City businesses operating in industries such as restaurants, hospitality, retail, construction, and personal services may face investigations involving sales tax collection and reporting.
Potential allegations include:
Sales tax enforcement frequently involves records from point-of-sale systems, bank accounts, invoices, payroll records, and third-party payment processors.
Where prosecutors allege that a business owner deliberately concealed revenue or retained taxes collected from customers, the investigation may involve both state tax violations and federal criminal charges.
The applicable law depends on the type of tax, the alleged conduct, and the jurisdiction involved.
One of the most significant challenges in a New York City tax fraud case is the potential involvement of multiple government agencies.
An individual or business may face inquiries from:
These agencies may share information or coordinate investigations when allegations involve overlapping financial conduct.
For example, an investigation into a Manhattan business that allegedly concealed revenue could raise questions involving federal income taxes, New York State taxes, New York City business taxes, and sales tax obligations.
A defense strategy must account for the possibility that information provided during one investigation could have implications for another.
New York City offers a Voluntary Disclosure and Compliance Program for certain taxpayers with outstanding city tax obligations.
The program may allow eligible taxpayers to address past-due city tax filings and potentially obtain relief from certain delinquency-related penalties.
However, eligibility restrictions apply. For example, taxpayers who have already been contacted by the Department of Finance regarding the specific liabilities generally cannot participate.
The program also excludes certain taxpayers involved in criminal investigations or specified tax avoidance transactions.
For individuals concerned about potential tax fraud allegations, voluntary disclosure requires careful consideration. A taxpayer should not assume that submitting a disclosure automatically prevents criminal prosecution or resolves potential federal or state tax exposure.
Before responding to government requests for interviews, producing extensive records, or making voluntary disclosures, taxpayers should understand the potential criminal and civil consequences of those actions.
Lowther | Walker can help clients accused in NYC tax cases evaluate the legal risks associated with government inquiries and assess the implications of potential resolution strategies. Our lawyers will review the availability and appropriateness of a voluntary disclosure depending on the facts, the applicable program requirements, and the status of any investigation.
Every tax fraud case depends on its specific facts, financial records, and applicable law. At Lowther | Walker, our defense attorneys examine the government’s allegations and develop a strategy designed to protect the client’s legal interests.
Federal tax crimes frequently require proof that the defendant acted willfully. A defense may focus on evidence that the alleged conduct resulted from an accounting error, misunderstanding of tax obligations, reliance on incomplete information, or a good-faith interpretation of a complicated tax provision.
The government must prove the required criminal intent rather than simply establish that an error occurred.
Tax fraud investigations often involve extensive financial records, including bank statements, tax returns, accounting ledgers, corporate documents, and electronic communications. Our attorneys examine the government’s calculations, the alleged tax deficiency, the accuracy of financial records, and whether the evidence supports the specific allegations.
Taxpayers frequently rely on certified public accountants, tax preparers, financial advisors, and attorneys to interpret complex tax requirements. Evidence concerning professional advice, the information provided to an advisor, and the taxpayer’s understanding of the resulting filings may be relevant to determining whether criminal intent existed.
Reliance on professional advice is not automatically a defense, but it may be significant when evaluating allegations of willful misconduct.
Federal tax investigations may involve searches of homes, offices, electronic devices, cloud accounts, and business records. When appropriate, defense counsel can examine whether investigators complied with constitutional requirements, whether search warrants were properly supported, and whether the government exceeded the scope of its authority.
Tax investigations may involve allegations of wire fraud, bank fraud, money laundering, or conspiracy. Each charge carries its own legal requirements. A defense strategy must account for the interaction between the tax allegations and any related financial crime charges.
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Lowther | Walker defends individuals and businesses facing federal tax fraud investigations across New York City. Whether you are being targeted by IRS Criminal Investigation (IRS-CI), the Department of Justice Tax Division, or the U.S. Attorney’s Offices for the SDNY and EDNY, our tax fraud defense lawyers are available 24/7 to respond to your urgent legal question
No-obligation. Fully confidential.
Call Us Today: (404) 496-4052
Yes. An investigation into a business can expand to include the personal finances of its owners, executives, or other individuals connected to the company’s financial activities. Investigators may examine personal bank accounts, real estate holdings, investment activity, and transactions involving related parties when those records may be relevant to the allegations. The scope of the investigation depends on the government’s specific concerns and the evidence it obtains. An individual who becomes the focus of an investigation should understand their legal position before voluntarily providing personal financial records.
A civil dispute involves breach of contract or commercial disagreements where one party sues another for money damages. It becomes a federal criminal charge when the Department of Justice alleges that you knowingly devised an intentional scheme to deceive and steal property using electronic communications. We frequently persuade federal prosecutors that a case is purely a civil business dispute, leading to a complete declination of criminal charges.
Yes, you generally have the right to decline an interview with an IRS criminal investigator. You also have the right to consult a federal criminal defense attorney before deciding whether to speak with investigators.
Although an agent may describe an interview as informal or voluntary, statements made during the conversation can become evidence. Even seemingly harmless explanations about financial transactions may create problems if they conflict with documents or information obtained elsewhere.
An attorney can help determine whether an interview is appropriate and, if so, how to approach it without unnecessarily exposing you to additional legal risks.
Yes. An accountant may become a government witness if investigators believe the accountant possesses relevant information about financial records, tax filings, or communications with the taxpayer. Investigators may ask an accountant to explain how returns were prepared, what information the taxpayer provided, or whether concerns about particular transactions were raised. Confidentiality protections for communications with accountants are generally more limited than attorney-client privilege. The applicable protections depend on the circumstances, the type of communication, and the professional relationship involved.
Individuals under investigation should understand what protections apply before discussing potentially incriminating matters with financial professionals.
Yes. Federal investigators may examine spouses, business partners, employees, or other individuals whose financial activities or communications are relevant to the investigation. That does not mean everyone connected to the taxpayer becomes a criminal suspect. For married taxpayers who file jointly, 26 U.S.C. § 6013 governs the filing of joint federal income tax returns. A joint return can make both spouses’ financial information relevant to an investigation, but simply filing jointly does not automatically mean both spouses committed a crime.
Yes. A bank can report suspicious financial activity to federal authorities, and that information can potentially contribute to a broader investigation. Under 31 U.S.C. § 5318(g), financial institutions are required to report certain suspicious transactions in accordance with federal anti-money-laundering requirements.
Possibly. Being under investigation does not automatically prohibit you from selling property, moving money, or conducting ordinary financial transactions. The concern arises when prosecutors believe an asset transfer is intended to conceal property, obstruct an investigation, or disguise the ownership or source of funds. For example, knowingly concealing or destroying records to interfere with a federal investigation can violate 18 U.S.C. § 1519. If the government’s allegations also involve transactions designed to conceal the nature, source, ownership, or control of criminal proceeds, 18 U.S.C. § 1956 may become relevant.
Yes. A federal tax fraud investigation can end without a criminal trial, and not every investigation results in criminal charges. Depending on the circumstances, the government may close an investigation, decline prosecution, pursue a civil tax matter, or resolve criminal charges through a negotiated plea.
If criminal charges are filed and a defendant chooses to plead guilty, Federal Rule of Criminal Procedure 11 governs the federal guilty-plea process and requires the court to ensure that the plea is entered properly.
High-value Manhattan and Brooklyn real estate transactions are prime targets for wire fraud investigations. This occurs in two ways: (1) Business Email Compromise (BEC), where hackers spoof realtor or attorney emails to divert escrow wire transfers; and (2) Material Misrepresentations, where developers, buyers, or brokers lie about appraisals, occupancy rates, or loan documents transmitted via email to secure financing.
Our NYC federal attorneys intervene in FBI, DEA, and IRS-CI investigations before indictments. Utilizing former federal agents, we conduct parallel investigations to dismantle government evidence. Our comprehensive services span pre-indictment negotiations, high-stakes federal trials, and post-conviction relief to protect your freedom and your financial assets.
