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IRS CI Continues To Target COVID-Related Tax Fraud

News, Offshore Account Update

Posted in on August 13, 2021

Since the early days of the pandemic, the Internal Revenue Service’s Criminal Investigation Division (IRS CI) has been targeting individuals and companies suspected of COVID-related tax fraud. Now, more than a year and a half later, IRS CI is continuing to pursue a large number of investigations focused on violations of the CARES Act and other pandemic relief statutes. Taxpayers targeted in these investigations must defend themselves by all means available, and this starts with hiring an experienced Maryland criminal tax attorney.

Recent Examples of COVID-Related Tax Fraud Investigations

In the first 10 days of August alone, IRS CI issued press releases highlighting five separate cases involving alleged COVID-19 relief fraud schemes. Specific allegations in these cases have included:

  • Securing contracts and up-front payment for personal protection equipment (PPE) from government agencies and private companies with no intention of performing under the contracts.
  • Securing loans under the Economic Injury Disaster Loan (EIDL) program by making false representations that the loan proceeds would be used as working capital, when in fact the funds were used for personal benefit.
  • Securing loans under the Paycheck Protection Program (PPP) from multiple banks by making false statements regarding payroll taxes and falsely certifying that the loan proceeds would be used for approved business purposes.
  • Seeking millions of dollars in PPP loans (which the defendant did not actually receive) by submitting false information and documents, and recruiting others to submit fraudulent PPP loan applications in exchange for kickbacks.
  • Defrauding the USDA's Coronavirus Food Relief Program and attempting to defraud the IRS' COVID-19 relief program by submitting false information to the USDA and submitting fraudulent forms to the IRS in order to request credits under the Families First Coronavirus Response Act (FFCRA).

As these are all criminal cases, the defendants targeted by IRS CI (working in partnership with other federal law enforcement agencies) in these cases face prison time, fines and an obligation to repay the funds they fraudulently obtained. Some of the defendants have already been sentenced to multi-year prison sentences, fines and restitution.

What To Do if You are Targeted for COVID-19 Relief Fraud in Maryland

If you learn that IRS CI is targeting you or your company for suspected COVID-19 relief fraud, it is imperative that you engage experienced defense counsel right away. Asserting a strategic defense during IRC CI’s investigation, rather than waiting until charges get filed, can significantly reduce your risk of conviction at trial.

Crucially, as IRS CI investigates a broad range of criminal tax offenses both related and unrelated to the pandemic, you cannot assume that you know why Special Agents are scrutinizing your returns. Experienced criminal tax defense counsel will be able to gather the information needed to focus on the allegations at issue and use the relevant facts and law to assert an effective defense on your behalf.

Contact Maryland Criminal Tax Attorney Kevin E. Thorn

If you need defense counsel for an IRS CI investigation, we strongly encourage you to contact us right away. To schedule an appointment with Maryland criminal tax attorney Kevin E. Thorn, Managing Partner of Thorn Law Group as soon as possible, call 240-235-5096, email ket@thornlawgroup.com or contact us confidentially online now.

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