Small Businesses, Construction Companies and Their Executives Are at Increased Risk of Facing Criminal Tax Fraud Investigations

The Internal Revenue Service (IRS) and U.S. Department of Justice (DOJ) are ramping up their efforts to target small businesses, construction companies, and their executives in criminal tax fraud investigations. We have seen increased activity in this area in 2026, with federal authorities shifting their focus away from large corporate tax enforcement to pursuing cases against much smaller businesses. Learn more from New York criminal tax lawyer Kevin E. Thorn, Managing Partner of Thorn Law Group.

Responding to a Criminal Tax Fraud Investigation: Key Insights for Small Business and Construction Company Executives

Although the amounts at stake in criminal tax fraud investigations targeting small businesses and construction companies (and their executives) are typically much smaller than those in large corporate tax fraud cases, smaller companies and their executives often face much greater risks. While multi-billion-dollar corporations and executives who earn eight-figure salaries can absorb fines with little consequence, facing liability as a result of an investigation can be devastating for smaller-scale businesses and executives.

With this in mind, when facing scrutiny from the IRS or DOJ, it is critical to quickly build and execute a targeted defense strategy. Among other things, this involves:

1. Determining the Focus and Scope of the Investigation

A key first step is to determine the focus and scope of the investigation. From underreporting taxable income to failing to remit collected payroll taxes, criminal tax fraud investigations can target a wide range of offenses. To build and execute an effective defense strategy, you will need a clear, comprehensive understanding of the specific allegations at issue.

2. Conducting a Federal Tax Compliance and Risk Assessment

In addition to determining the focus and scope of the investigation, it will be necessary to promptly conduct a federal tax compliance and risk assessment. In short, you need to know what (if anything) federal agents might uncover during the inquiry. If you have the documentation you need to affirmatively demonstrate compliance, you should be able to favorably resolve the inquiry in this scenario. However, if mistakes have been made, this is a different scenario entirely.

3. Identifying Viable Defenses and Potential Outcomes

Once you have a clear understanding of the risks presented by the investigation, you can focus on identifying viable defenses and potential outcomes. Even in high-risk scenarios, it will be possible to achieve a favorable resolution that avoids federal prosecution in many cases. With that said, there are no guarantees, and working closely with experienced defense counsel will be essential for achieving a resolution that avoids unnecessary consequences.

Schedule a Call with New York Criminal Tax Lawyer Kevin E. Thorn Today

If your small business or construction company is facing a criminal tax fraud investigation in New York, we can help—but it is important that you contact us promptly. To schedule a call with New York criminal tax lawyer Kevin E. Thorn, Managing Partner of Thorn Law Group, as soon as possible, call 914-534-6004 or tell us how we can reach you online now.