In many tax audits done by the IRS, the agency is only interested in collecting taxes owed, interest, and with penalties. The IRS can impose a negligence penalty, along with a late filing penalty, and charge interest on all the above. In a tax audit, even in case the IRS suspect you have committed tax fraud, they can impose a civil tax fraud penalty. This penalty is typically equal to 75 percent of the tax you owe, plus interest on the penalty.
Based on the degree of fraud involved, the IRS auditor may ask a tax fraud expert to check over your case and see whether it ought to be sent for criminal prosecution. Normally, this specialist has expertise and will seek guidance of the IRS’ tax fraud attorney for help if it appears necessary.
The penalties for tax fraud are severe. You could get up to five years in jail, plus fines of $500,000, in addition to the expense of prosecution. When the criminal tax case is finished by the IRS criminal unit, it’ll be referred back to the IRS Examination Division in which the taxes are assessed. The IRS can add the civil tax fraud penalty in addition to the criminal tax fraud penalties. It’s important to understand that tax statements from civil or criminal tax fraud can’t be discharged through bankruptcy. The civil fraud penalty is dischargeable in a Chapter 7 bankruptcy.
Tax fraud is defined as intentional wrongdoing. You must have an intentional violation, to be accused of tax fraud. Carelessness isn’t tax fraud. The IRS looks for certain things when assessing whether fraud occurred, such as: understatement of income, inadequate records, failure to file, hiding assets, dealing in money, failure to make estimated cash payments, failure to cooperate with government, failure to make payments.
For those who have one of these issues and are audited by the IRS, you may need a tax fraud lawyer. Actions you take during a tax audit can transform the usual tax audit into a tax fraud case. By way of instance, lying or giving false answers to IRS investigators, delaying the analysis, or other activities to mislead IRS agents can indicate fraud. Experienced tax fraud attorneys can help you navigate an IRS tax audit, and help you formulate a plan.
Is Tax Fraud a crime?
Tax fraud is a frequent charge which could result from real mistakes in reporting tax information to the IRS. Tax offenses are a few of the most ordinary white collar offenses, which affects business professionals and ordinary Americans. Failing to file taxes underreporting income, or overstating deductions are grounds for audits. If the IRS finds cause after someone to prosecute falsifies their tax report – the IRS will investigate.
Do you need an attorney for a tax fraud case?
It is always recommended to have legal representation in tax related cases. With the ever changing laws regarding filing of taxes, hiring a specialized attorney can ensure you get treated fairly and are fully aware of the charges before you. It is important to handle matters related to tax fraud immediately and carefully in order to protect yourself or your business from penalties, interest and even potential jail time. This is a crucial and sensitive matter, and something as simple as misuse of legal wording can really affect the outcome of your case. Taxes are a very complex area and if you are not properly informed of your legal rights and responsibilities, the consequences could be devastating to you. If you find yourself in trouble with the IRS, only an attorney can protect you under the attorney/client privilege. Even if you don’t believe you have done anything wrong, it is best to consult with an expert in the field. There are various programs and settlement options that most individuals are unaware of and only an expert in tax law can provide you with a full and complete understanding of your options and obligations. Unless you are extensively familiar with tax laws, it is highly recommended you have a tax attorney in your corner to help you with your case.
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