Pleading the Fifth in an IRS Audit

You may be concerned about criminal liability during a federal tax audit and hopeful that you may exercise your right to remain silent under the Fifth Amendment to the federal Constitution. However, exercising your Constitutional right to remain silent may not work during a tax audit because it is a civil proceeding, and in certain cases, a civil audit is unlikely to become a criminal case. Just the act of invoking the Fifth in an audit may get you more closely scrutinized or result in penalties. However, many criminal tax cases that are referred to the IRS Criminal Investigation Division do arise from a civil audit, and most times the auditor will not tell the taxpayer that they are planning to make such a referral. Therefore, it is important to consider situations in which invoking the Fifth Amendment might be appropriate and to retain professional representation to guide you in making such a determination early in the audit process. If you are thinking about pleading the Fifth in an IRS audit, the experienced Los Angeles IRS audit lawyers at the Ben-Cohen Law Firm may be able to advise and represent you during the audit process and anything that happens afterward.

If you are being audited, you may not need to answer questions posed by the IRS; however, if you refuse to produce your tax-related documents, you may be forced to do so in court. Information in your documents may be used against you, even if such information is incriminating. It may be appropriate to invoke the Fifth Amendment privilege in response to an IRS request for information if you think that the IRS may be investigating you for a crime, but you should do so with the help of a lawyer.

For instance, trying to evade or defeat a tax liability (tax fraud) is a felony under Internal Revenue Code Section 7201. Under Section 7201, one type of tax evasion is a willful attempt to avoid or defeat a tax assessment, and the other type of tax evasion is a willful attempt to avoid or defeat the payment of tax. For example, if you try to transfer assets to stop the IRS from figuring out your true tax liability, or you file a false return omitting income or claiming false deductions, this is trying to avoid an assessment. Willful underreporting is an effort to evade the correct assessment of tax. An evasion of payment happens once the tax that is owed has already been established, and there is an affirmative concealment of money.

If you have already tried to evade or defeat a tax liability and believe that you are being audited for that reason, it may be appropriate to plead the Fifth with the help of an IRS audit attorney at our Los Angeles firm in connection with answering questions. In order to claim the Fifth Amendment privilege during an audit, you must face a real and substantial hazard of incrimination, and each answer or the act of producing each record must be sufficiently incriminating and testimonial to trigger the privilege.

On the other hand, the Fifth Amendment does not allow you to claim blanket protection so that you may refuse to give the IRS your income or expense information. If you are not able to identify the incriminating nature of information sought by the IRS, a court is likely to find the risk of self-incrimination insubstantial and will require you to provide the information sought.

If you are a taxpayer and believe that you may need to plead the Fifth in an IRS audit, you should consult a tax attorney to see if that strategy or another is more likely to yield a favorable outcome. Los Angeles IRS audit attorney Pedram Ben-Cohen, our principal, is an attorney who is a Certified Taxation Law Specialist and a CPA who understands the process, as well as how relevant laws may be applied. Contact us at (310) 272-7600 or complete our online form to set up your appointment. Our firm represents taxpayers throughout Los Angeles County, including in Santa Monica, Malibu, Beverly Hills, Burbank, Pasadena, Sherman Oaks, Venice, and West Hollywood.