Mar 30, 2018
Connecticut Tax Fraud Lawyers
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, in addition to a late filing penalty, and charge interest on all of the above. In a tax audit, if the IRS suspect you’ve 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.
Based on the degree of fraud involved, the IRS auditor may ask a tax fraud expert to look at your case and see if it ought to be sent for criminal prosecution. Typically, this specialist has expertise and will seek advice of the IRS’ tax fraud attorney for help if it appears necessary.
The penalties for tax fraud are severe. You could get up to 5 years in jail, plus fines of $500,000, in addition to the cost of prosecution for each tax crime. When 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 penalties. It’s important to understand that tax statements from civil or criminal tax fraud cannot 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 isn’t tax fraud. The IRS looks for certain things when evaluating whether fraud occurred, such as: understatement of income, inadequate records, failure to file, concealing assets, dealing in money, failure to make estimated cash payments, failure to cooperate with authorities, failure to make payments.
If you have any of these problems and are audited by the IRS, you might need a tax fraud attorney. Actions you take during a tax audit can transform the usual tax audit into a tax fraud case. By way of example, lying or giving false answers to IRS investigators, delaying the analysis, or other activities to mislead IRS agents can indicate tax 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 genuine mistakes in reporting tax information to the IRS. Tax offenses are some of the most ordinary white collar crimes, which affects business professionals and average Americans. Underreporting income, failing to file taxes, or overstating deductions are grounds for audits. If the IRS finds cause further afield following someone falsifies their tax accounts – then the IRS will heavily investigate.
Do You Need An Attorney For A Tax Fraud Case?
In short, yes you definitely need a lawyer for a tax fraud case. Why? Continue reading to find out.
When it comes to tax evasion, there are two kinds it can be. There is fraud and there is negligence.
Tax fraud is when you knowingly and willingly evade or attempt to evade tax laws or defraud the IRS. This can happen when you intentionally fail to file an income tax return, intentionally fail to pay your taxes, intentionally fail to report all income you receive, intentionally make false claims, or intentionally file a false return. Notice the common denominator? INTENTIONALLY.
Negligence is when you unknowingly or unintentionally underpay the IRS or make a carless error in a report. The IRS does often give citizens benefit of the doubt- although even in negligence, there is still a fine to pay.
If you are convicted of tax fraud, you can face up to five years in prison and be fined up to $250,000 for individuals and $500,000 for corporations. This really depends on the type of fraud. The harshest penalties come from the intentional attempt to evade paying taxes. Writing a fraudulent or false statement (which could even be perjury) will get you a less severe punishment, and intentionally withholding information will have the least punishment- although all of these can get you jail time.
If you are convicted of negligence, the IRS will typically just fine you 20% of what you underpaid. Compared to being convicted of a felony, spending time in jail, and being fined hundreds of thousands of dollars, this is much better.
You need a lawyer so that he/she can argue for your charge to be lowered from tax fraud to negligence- giving you a FAR better outcome in the end. Best case scenario? Your case can be thrown out of court. Without a lawyer, you are up against the professionals and the stakes are higher than you should be comfortable with.