Small Businesses, Construction Companies and Their Executives Are Facing Criminal Tax Investigations in 2026

Small businesses, construction companies, and their executives are increasingly facing scrutiny related to their federal tax filings. The Internal Revenue Service (IRS) and the U.S. Department of Justice (DOJ) have ramped up their efforts to target these taxpayers in 2026—with criminal tax fraud investigations resulting in serious federal charges in many cases. Learn more from Maryland criminal tax attorney Kevin E. Thorn, Managing Partner of U.S. International Tax Advisors:

The IRS and DOJ Are Targeting Small Businesses, Construction Companies and Their Executives for a Wide Range of Criminal Offenses

We have recently seen the IRS and DOJ pursue criminal tax fraud investigations targeting small businesses, construction companies, and their executives in cases involving a wide range of suspected federal tax law violations. While facing any federal allegations can pose substantial risks, many of these investigations have targeted multiple allegations under the Internal Revenue Code (IRS) and other federal tax laws. Some examples of these allegations include:

• Underreporting taxable business or individual income
• Improperly claiming business deductions (including claiming personal expenses as business expenses)
• Improperly claiming business tax credits and exemptions
• Improperly classifying employees as independent contractors
• Underreporting payroll tax liability
• Failing to timely remit payroll taxes withheld from employee compensation
• Failing to properly disclose offshore bank accounts or other foreign financial assets

Along with these tax-specific allegations, criminal tax fraud investigations can lead to other serious criminal charges. For example, the DOJ routinely pursues charges for the following offenses in these cases—all of which carry the potential for substantial fines and prison time:

• Government fraud (18 U.S.C. Section 1031)
• Mail fraud and wire fraud (18 U.S.C. Sections 1341 and 1343)
• Money laundering  (18 U.S.C. Section 1956)

Small businesses and construction companies targeted in criminal tax fraud investigations can face enormous financial liability, while targeted executives can face fines and prison time. The IRS and DOJ have the capabilities to target individual and corporate U.S. taxpayers worldwide, and once an investigation is underway, a prompt and strategic defense is essential to avoid unnecessary consequences.

What to Do if You Receive a Target Letter, Search Warrant, Summons or Subpoena from the IRS or DOJ

With this in mind, small-business and construction-company executives who have been contacted by the IRS or the DOJ should promptly engage experienced defense counsel. In this scenario, it will be critical to quickly assess the risks and develop a defense strategy tailored to the circumstances at hand. While it will be possible to secure a favorable pre-charge resolution in many cases, facing a federal grand jury indictment is a very real possibility, and federal prosecutors will be prepared to pursue a conviction by all means available.

Schedule an Appointment with Maryland Criminal Tax Attorney Kevin E. Thorn

If you need more information about defending against a federal criminal tax fraud investigation (or avoiding one, if possible), we encourage you to contact us promptly. To schedule an appointment with Maryland criminal tax attorney Kevin E. Thorn, Managing Partner of U.S. International Tax Advisors, please call 240-235-5096 or contact us confidentially online today.