In most tax audits done by the IRS, the agency is 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, even in case 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 specialist to look at your case and see whether it ought to be sent for criminal prosecution. Typically, this specialist has experience and will seek advice of the IRS’ tax fraud attorney for help if it looks necessary.
The penalties for tax fraud are serious. You could get up to five years in jail, plus fines of $500,000, in addition to the expense of prosecution for each tax offense. 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 on top of the criminal tax fraud penalties. It’s important to understand that tax bills 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 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 authorities, failure to make payments.
For those who have any 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. By way of instance, 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 frequent charge which can result from real mistakes in reporting tax information to the IRS. Tax offenses are some of the white collar crimes, 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 further prosecute after someone falsifies their tax accounts – then the IRS will heavily investigate.
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