In 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 of the above. In a tax audit, if the IRS suspect you have committed tax fraud, they can impose a civil tax fraud penalty. This penalty is typically equal to 75% of the tax you owe, plus interest on the penalty.
Depending on the level of fraud involved, the IRS auditor may ask a tax fraud expert to look over your case and see if it should be sent for criminal prosecution. Normally, this specialist has experience and will seek guidance of the IRS’ tax fraud lawyer for help if it appears necessary.
The penalties for tax fraud are serious. You could get up to 5 years in jail, plus fines of $500,000, in addition to the expense of prosecution for each tax crime. Once the criminal tax case is completed by the IRS criminal unit, it will be referred back to the IRS Examination Division in which the taxes are assessed. The IRS can add the civil tax fraud penalty on top of the criminal tax fraud fines. It’s important to know 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. To be accused of tax fraud, you have to have an intentional violation. Mere carelessness is not 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 cash, failure to make estimated cash payments, failure to cooperate with authorities, failure to make payments.
If you have one of these problems and are audited by the IRS, a tax fraud lawyer might be needed by you. Can transform a tax audit that is normal into a tax fraud case. For example, lying or giving false answers to IRS investigators, delaying the investigation, or other actions 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 common charge which could result from real mistakes in reporting tax information to the IRS. Tax offenses are some of the most frequent white collar crimes, which impacts Americans and business professionals. Underreporting income, failing to file taxes, or overstating deductions are grounds for audits. If the IRS finds cause further prosecute after someone falsifies their tax accounts – then the IRS will heavily investigate.
Tax Fraud Case: Do You Need An Attorney
Tax fraud cases are more common than you might think. The IRS makes their tax code so complex that it is a wonder that anyone is able to follow along with what it all means. The fact that some people end up committing fraud is inevitable given the way that it is set up currently.
In the event that you receive a letter from the IRS saying that they believe you have committed tax fraud you will want to contact an attorney right away. These matters are incredibly serious and can have dire consequences if left unchecked. The interest and penalties on unpaid taxes are one thing, but the possibility of jail time is something that really ought to stir you up.
Tax fraud attorneys can review your case and see how and where things may have gone wrong. They can also determine if the IRS has actually made a mistake on its end and are now screaming that you are the one responsible for committing fraud when in fact it was a mistake on their end. Those types of things happen, and when they do it is nice to know that you have an advocate working for you.
The biggest responsibility of an attorney in these cases is to negotiate directly with the IRS for you. They can put on their lawyer hat and take over so many of the responsibilities of having to speak with the IRS at all. That is something that people can really appreciate as most of us do not care to speak with them any more than absolutely necessary. Best of all, the attorney will be working for you the whole time to make sure that the IRS gives you the most favorable treatment possible. It is something that is worth your time and effort.
Todd is a miracle worker who will work tirelessly for you and your family. He is one of the few attorneys i've met - who I earnestly trust to protect me, and who I am happy to refer to our friends and fellow family members. The Spodek Law Group is someone you want on your side, because they will treat you just like family. Todd and his team are available 24/7, and they always answered our calls. Even when we were being irrational, and crazy - they were calm and super helpful. Just call Todd. He gives you a free consultation and is very understanding.- Donna & Robert
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