The focus of our practice is civil and criminal taxpayer representation, and whether in Stamford, Connecticut or elsewhere, the IRS has stepped up its focus on identifying and prosecution criminal tax matters. What has developed is a new Special Enforcement Program (“SEP”), and its examiners may be coming to taxpayer near you.
What is “SEP”?
SEP is a specialized compliance program within the IRS Small Business/Self-Employed Operating Division directed toward that segment of the population which derives substantial income from either legal or illegal activities and intentionally understate their income.
When we represent taxpayers before the IRS or the Department of Justice Tax Division, and we have noted the increase in using civil exam functions to identify and pursue potential tax fraud. The SEP examiners, under Internal Revenue Manual provision 4.16.1.3 focus on many areas, including, but not limited to:
- Unreported income
- False expenses
- Abusive return preparers
- Non-filers
- Racketeering/Organized Crime
- Narcotics Trafficking
- Prostitution
- Bank Fraud
- Offshore activities
- Gambling
What is disconcerting for tax professionals is these SEP exams purport to be a civil exam but utilize criminal investigative techniques, and many SEP cases result in prosecution recommendations being made. This means your next routine civil IRS exam may be neither routine nor civil, but rather a disguised criminal tax investigation being handled by a SEP examiner.
If you would like to discuss issues where you believe the IRS SEP examiner is involved, or any other civil or criminal IRS matter in Stamford, Connecticut, please feel free to contact me at (860) 494-4786 or by email at egreen@convicerpercy.com
Eric L. Green, Esq.
Convicer, Percy & Green, LLP
60 Long Ridge Road, Suite 202
Stamford, CT 06902
Ph. (203) 602-5550
Fax: 203-286-1311
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