Defending People Accused of Tax Fraud: Protecting Your Future, Assets, and Livelihood

Paying taxes is an essential part of life that all working professionals must go through. But the complex nature of the tax system can lead to accusations of tax-related fraud. Being accused of tax fraud can be a life-changing experience with long-lasting consequences. At Spodek Law, we understand that getting help as soon as possible is crucial. With our team of dedicated attorneys, we are committed to providing our clients with the legal knowledge and expertise they need to defend themselves against such accusations.

Understanding Tax Fraud and Its Consequences

Tax fraud refers to any activity intentionally done by an individual, business, or organization that allows them to avoid paying the correct amount of taxes. The IRS Criminal Investigation Division (CDI) begins a probe into financial details when they suspect fraudulent activity has occurred. Filing a false tax return, under-reporting income, willfully failing to file an income tax return, and claiming personal expenses as business expenses are some of the acts that fall under this broad definition. It is important to understand the differences between tax fraud, tax evasion, and tax avoidance. Tax evasion is a form of tax fraud that involves misrepresentation of taxable income, while tax avoidance is the legal use of the tax system to one’s own advantage.

Dealing with Tax Evasion

Tax evasion, a common form of tax fraud, involves concealing, lying, or some other form of deceit to pay less in taxes than what is owed. The penalties for tax evasion can be severe, including up to five years in prison and a fine of up to $250,000. Defending against tax evasion charges requires the expertise of a skilled white-collar defense attorney.

Under-Reported Income and Failure to File

When the IRS believes that an individual has under-reported their income, they will send a CP2000 notice. This does not mean that an audit is being conducted, but it does indicate that the IRS believes there is a discrepancy in what is owed. Responding to the notice before the deadline is essential, and seeking the guidance of an experienced tax attorney is recommended. An attorney can determine whether the taxpayer is in compliance and negotiate repayment terms, if necessary. Failing to file taxes can lead to penalties and interest, and the longer an individual waits, the more money it could cost them.

Claiming Personal Expenses as Business Expenses

It is crucial to keep personal and business expenses separate, as claiming personal expenses as business expenses is a form of tax fraud. The IRS has many ways of discovering such infractions, such as regular tax evaluations, cyber security breaches, or social media. Seeking the guidance of a skilled white-collar defense attorney is essential when facing such accusations.

The Law and Tax Fraud

Federal law states that anyone who knowingly attempts to defraud the IRS by not paying the necessary amount of taxes is subject to a maximum fine of up to $100,000 or, if it is a corporation, no more than $500,000, along with the taxes owed. The person convicted of tax fraud may also face imprisonment of up to five years. When accused of tax fraud, defense strategies include arguing that the act was committed in an unwilful manner or solely acting based on the information provided by others.

In conclusion, the consequences of being accused of tax fraud can be severe. Seeking the guidance of a skilled white-collar defense attorney can help individuals to protect their future, assets, and livelihood. At Spodek Law Group, we are dedicated to ensuring that our clients receive the best legal representation and the protection they need.