Federal Criminal Tax Defense in Charleston, SC

Introduction

Federal criminal tax investigations can be intimidating for individuals and business owners alike. The IRS has a dedicated Criminal Investigation Division (CID) that targets serious violations of tax law and related financial crimes​. When the IRS suspects tax fraud or evasion, it will aggressively pursue charges and refer cases to the U.S. Department of Justice, or the United States Attorney’s Office in the District of South Carolina, for prosecution​

Facing IRS agents or prosecutors over alleged tax crimes is a high-stakes situation – convictions can result in prison time, massive fines, and life-altering consequences. This is why having an experienced federal defense attorney is critical from the earliest stages of an investigation. A strong legal defense can protect your rights, challenge the government’s case, and often distinguish between a favorable outcome and severe penalties.

Common Federal Tax Crimes

Federal tax offenses come in several forms. Below are some of the most common criminal tax charges, which the IRS and Department of Justice frequently prosecute, along with their basic definitions and potential consequences:

• Tax Evasion (26 U.S.C. § 7201) – Willfully attempting to evade or defeat a tax owed. This is one of the most serious tax crimes involving affirmative acts like hiding income or falsifying records. Tax evasion is a felony punishable by up to 5 years in prison and $100,000 in fines for individuals​ (higher for corporations), plus the costs of prosecution.

• Filing False Tax Returns (26 U.S.C. § 7206) – Submitting any tax return or related document under penalty of perjury that the taxpayer does not believe is true and correct in every material matter. This includes willfully filing false returns or aiding someone else in filing a false return, and submitting fraudulent documents as a part of a tax return. It is a felony resulting in up to 3 years imprisonment and fines up to $100,000​ per offense.

• Failure to File a Tax Return (26 U.S.C. § 7203) – Willful failure to file a required tax return, supply requested information, or pay tax when due. Unlike the above offenses, a single count of failure to file is typically a misdemeanor. Still, it carries up to 1 year in jail and $25,000 in fines for an individual (with higher penalties for businesses). Repeated failures or specific violations (such as willfully not filing certain information reports) can elevate the offense to a felony with higher penalties.

• Conspiracy to Defraud the IRS (18 U.S.C. § 371) – An agreement between two or more persons to defraud the United States (often by impeding the IRS) or to commit a federal tax offense. Even if the underlying tax crime is not completed, the agreement and an overt act in furtherance of the conspiracy can lead to charges. Conspiracy is a felony punishable by up to 5 years in prison, along with fines (as determined under federal guidelines)​.This charge is commonly added to other offenses when multiple people (business partners, spouses, or accountants) are accused of working together to evade taxes or file false returns.

Why does it matter? Federal tax crimes are not taken lightly and are thoroughly investigated by the IRS – they implicate willful misconduct against the government’s revenue. Each of the above charges requires willful intent (meaning the violation was done deliberately, not by accident). Prosecutors must prove the defendant intentionally violated a known legal duty. A strong defense will often focus on refuting this intent element, as discussed below.

IRS Criminal Investigation Process

How IRS Criminal Cases Start

Most criminal tax cases begin long before any charges are filed. The IRS Criminal Investigation Division (CID) typically initiates cases based on evidence of fraud or tax crimes uncovered in other contexts. This can happen when an IRS auditor or revenue officer detects possible fraud during a civil audit or collection action​. Often, it involves individuals providing information about others they know are involved in tax fraud. Also, banks can report suspicious activity, or other agencies investigating criminal activity, such as financial fraud or drug cases, can get IRS involved - it is common for individuals who are accused of stealing money are also accused of not paying taxes on any of the illegal gains.

Once potential tax fraud is identified, IRS special agents conduct an initial investigation to evaluate whether a crime may have occurred​. This can sometimes result in activities visible to those being investigated. Investigators may be interviewing witnesses, conducting surveillance, issuing subpoenas for bank records, executing search warrants, or seeking email records. Normally, this happens quietly and individuals under investigation are unaware. However, sometimes banks will notify customers that records have been requested, or someone being interviewed will let the person know. If this occurs, the individual who suspects they are under investigation need to contact an attorney immediately to see if they can minimize any potential impact of the investigation or possible charges.

Once the investigation is complete, the IRS investigators will seek federal charges, if they believe the investigation reveals criminal activity.

Signs You May Be Under IRS Investigation

While IRS criminal investigations are usually covert, some red flags can alert you that you’re on the IIRS’sradar. Warning signs that you or your business may be under an IRS criminal tax investigation include:

• Unannounced visits from IRS special agents – If IRS CI agents (who carry badges and guns) show up at your home or business unexpectedly, it’s a strong sign of a criminal inquiry​. Unlike routine auditors, CID agents typically appear without warning to catch targets off guard and may identify themselves as criminal investigators.

• Interviews of people you know – The IRS may start contacting your associates, employees, clients, or accountants. If business partners, staff, or others inform you that IRS agents have questioned them about your finances or tax filings, a criminal case may be in progress​. CID often builds its case by quietly gathering information from third parties before approaching the primary target.

• Subpoenas for records – Receiving a grand jury subpoena or IRS summons for extensive financial records is a clear indicator. The government may legally compel banks, employers, or even you directly to produce documents for an investigation. If you or your bank receive a subpoena for your records​, the IRS is likely collecting evidence for a potential criminal case.

• Unusual bank or financial activity – Some targets first suspect trouble when they notice irregularities with their accounts. For example, your bank might freeze funds or report that federal agents have requested information about your transactions. Such actions can occur when the IRS uses summonses on third parties during an investigation.​

Bottom line: If any of these events occur, it is critical to consult a tax defense attorney immediately. By the time you recognize the signs, the IRS may have already spent months building a case. Early legal intervention can sometimes prevent charges or mitigate the fallout.

Role of Grand Juries and DOJ Involvement

Not every IRS investigation results in criminal charges – but when the evidence is serious, IRS CI will hand off the case to federal prosecutors. The U.S. Department of Justice (DOJ) Tax Division and U.S. Attorneys Office in the District of South Carolina routinely work together to prosecute federal tax crimes. Typically, IRS agents will forward a prosecution recommendation to the United States Attorney’s Office, which will then seek DOJ review. The two offices will then work together going forward.

One key tool in this stage is the federal grand jury. The IRS cannot indict someone alone – only a grand jury of citizens can issue indictments for felony charges. Prosecutors work with CID to convene a grand jury when they have sufficient evidence. The grand jury can issue subpoenas for testimony and records, compelling further evidence under secrecy.

If the grand jury finds probable cause that a crime has been committed, and that an identified individual committed the crime, it will return an indictment, and the case moves into the courtroom phase. Throughout this process, DOJ prosecutors, Assistant United States Attorney's and IRS agents work hand-in-hand – but once an indictment is filed, the United States Attorney’s Office leads the prosecution, with IRS agents as investigators and witnesses.​

For the target of an investigation, the involvement of a grand jury and federal prosecutors means the situation is dire. At this point, having a seasoned federal defense lawyer is vital. Your attorney can interface with the DOJ, potentially engaging in pre-indictment negotiations or presentations to dissuade charges and begin mounting defenses (or exploring resolution options) before a case goes to trial.

Penalties for Federal Tax Crimes

The penalties for federal tax offenses are severe and can impact every aspect of your life or business. If convicted of a criminal tax charge, you may face:

• Prison Time: Almost all major federal tax crimes are felonies with significant incarceration. For example, tax evasion and conspiracy each allow for up to 5 years in federal prison per count​, while filing a false return can mean up to 3 years behind bars.​

  Even the misdemeanor offense of willful failure to file a return is punishable by up to 1 year in jail for each year missed​

  Sentences can add up if multiple counts are charged. Federal prison time is a real possibility in egregious cases, as judges often look to make an example of willful tax cheats.

• Steep Fines and Restitution: In addition to imprisonment, courts can impose heavy fines for tax crimes. Felony tax charges under Title 26 typically allow fines up to $100,000 for individuals (and $500,000 for corporations) per count​

  Under Title 18, conspiracy or related fraud charges can bring fines up to $250,000 for individuals (per general federal acceptable guidelines). Offenders are usually ordered to pay restitution, i.e., repayment of the taxes evaded or the loss to the U.S. Treasury. The financial hit from a tax conviction can easily reach hundreds of thousands of dollars when combining fines, back taxes, penalties, and interest.

• Asset Forfeiture: In some cases, the government can seize assets involved in or derived from tax fraud. Through forfeiture proceedings, authorities may take property before a conviction if they show it’s connected to the crime​.

  You could lose homes, cars, bank accounts, and other property tied to the offense beyond paying fines.

• Professional and Personal Consequences: A federal tax conviction can destroy reputations and careers. Licensed professionals (accountants, attorneys, financial advisors, etc.) can lose their licenses or certifications if found guilty of a fraud-related offense. Business owners might be barred from government contracts or face increased scrutiny in future tax matters. The stigma of a felony record can hinder future employment and business opportunities. In addition, the stress and distraction of a criminal case (and possible incarceration) can strain family relationships and mental health. In short, the fallout goes far beyond the courtroom – it can permanently alter your professional trajectory and personal life.

Given these stakes, avoiding a charge, avoiding a conviction or mitigating penalties is the top priority when facing a criminal tax charge. With knowledgeable legal counsel, it’s sometimes possible to reduce its felony charge to a misdemeanor, negotiate lower fines, or even avoid prison through plea agreements or other resolutions. The following section discusses defense strategies that can lead to such outcomes.

Defense Strategies

Defending against federal tax charges requires a proactive and skilled approach. Prosecutors must prove that you willfully violated the law – in other words, you intentionally committed fraud or evasion rather than making an honest mistake. An effective defense will attack the government’s evidence on this and other points. Some common defense strategies in criminal tax cases include:

• Challenging Willful Intent: Lack of intent is often the cornerstone of a tax fraud defense. Your attorney can argue that errors or omissions were due to negligence, confusion, or bad advice – not an intent to deceive the IRS. If the prosecution cannot prove you acted willfully, then no tax crime was committed​

  Demonstrating good-faith efforts to comply (such as reliance on an accountant’s guidance) can create reasonable doubt about criminal intent​

  The more complex your taxes, the easier it is to show a jury that misunderstandings, not malice, led to the problem.

• Procedural and Constitutional Challenges: A savvy defense lawyer will scrutinize how the IRS gathered its evidence. Any procedural missteps or violations of your rights can be grounds to suppress evidence or even dismiss charges.

• Forensic Accounting and Evidence Review: Criminal tax cases are often battles of the documents. We dissect the IRS’s numbers with forensic accountants and tax experts. These experts can reconstruct financial records, trace funds, and identify errors or inconsistencies in the government’s analysis​

• Negotiating with Prosecutors: Not every criminal tax case goes to trial. Many are resolved through strategic negotiations. A defense attorney experienced in federal tax matters can engage with DOJ prosecutors to seek a favorable plea agreement or even a non-criminal resolution. In rare cases, if the prosecution’s case has significant problems, prosecutors might convince them to drop the criminal matter in favor of a civil tax settlement. The key is having an attorney who knows how to evaluate the evidence and determine when is the right time to go to trial, or to seek a plea agreement.

Every case is unique, and the best defense strategy will depend on the facts and the client’s circumstances. Whether it’s asserting your innocence or crafting a plea to mitigate consequences, the guidance of an experienced federal tax defense lawyer is indispensable. Your attorney can advise on steps like voluntary disclosure (if appropriate), protecting your assets during the case, and handling parallel civil tax issues. With the right approach, even a severe tax case can be managed to achieve the most favorable outcome possible.

Why Choose Nathan Williams

When you’re facing a federal criminal tax charge in South Carolina, you need a defense attorney who knows tax law and how federal prosecutors build their cases. Nathan Williams offers that rare combination of experience. He is a former Criminal Chief at the U.S. Attorney’s Office in South Carolina​ – he served as the supervisor of all federal prosecutors and all criminal cases in the state. In that role (2019–2022), Nathan supervised over 30 federal prosecutors and oversaw every federal criminal case in the district​.

This means he has a clear understanding of how the government pursues tax fraud cases, how grand jury indictments are obtained, and how prosecutors think. He now uses that experience to defend individuals and business clients against the same charges he once supervised.

Nathan’s credentials include over 24 years of criminal law experience, including 14 years focused on federal cases​. He has litigated more than 100 jury trials (over 20 of those in federal court) to verdict​. His track record speaks for itself, from complex white-collar frauds to high-profile cases. Nathan has handled intricate financial investigations and understands the nuances of tax law enforcement and has even prosecuted complex financial and corporate fraud cases during his tenure as a prosecutor​.

By choosing Nathan Williams, you get a defense lawyer to protect your rights and navigate the system aggressively. He will thoroughly investigate the government’s case, engage reputable experts, and leverage his relationships and reputation in the local federal court to your advantage. When the stakes are this high, you need an attorney who has been on both sides of federal tax cases. Nathan’s perspective as a former federal prosecutor gives you a strategic edge in fighting IRS and DOJ allegations.

Free Consultation for Federal Tax Defense

If you or your business are facing a federal tax investigation or have been charged with a tax crime in Charleston or anywhere in South Carolina, time is of the essence. Early action can significantly improve your chances of a favorable result. Contact our firm today for a free, confidential consultation with Nathan Williams. We will review the details of your situation, answer your questions, and outline a tailored defense strategy to protect your freedom and financial future. As a dedicated federal criminal tax defense attorney, Nathan will personally guide you through every step – from the first sign of IRS trouble to the final resolution of your case. Don’t wait for the IRS or DOJ to dictate your fate. Call now to put a former federal prosecutor on your side and take control of your defense.

Your future and livelihood are too important to leave to chance. Schedule your free consultation, and let us fight for you. We stand ready to defend your rights and achieve the best possible outcome so you can confidently move forward.

📞 Call us at (843) 473-700, or click below for a free Confidential Consultation.