In tax audits the agency is interested in collecting taxes and with penalties. The IRS can impose a negligence penalty, in addition to a late filing penalty, and charge interest on all 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 check over your case and see whether it ought to be sent for criminal prosecution. Typically, this specialist has experience 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 cost of prosecution for each tax crime. Once the criminal tax case is finished by the IRS criminal unit, it will be referred back to the IRS Examination Division where 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 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 must 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, concealing assets, dealing in money, failure to make estimated cash payments, failure to cooperate with authorities, failure to make payments.
For those who have one of these issues and are audited by the IRS, you may need a tax fraud attorney. Can transform a tax audit that is normal . For 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 frequent charge which could result from genuine mistakes in reporting tax information to the IRS. Tax offenses are some of the most ordinary white collar offenses, which affects business professionals and ordinary Americans. Underreporting income, failing to file taxes, or overstating deductions are grounds for audits. If the IRS finds cause to afield following someone falsifies their tax report – then the IRS will greatly investigate.
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