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The day has come. You’ve been informed that you’re being audited by the IRS. This is a day that no one, even the most careful of taxpayers, looks forward to. It means that you’re going to have to collect documents, talk to auditors, and take time away from your daily life to deal with the audit. Even for those people who have kept meticulous records and know that they’re not guilty of any type of tax crime will dread the audit. Feelings of anger, sadness, and dread might play a part in the audit process itself, especially if the taxpayer knows that there are discrepancies there.
Understanding the Audit Process
Step one is the notice you’re going to receive in the mail informing you that the IRS needs additional information about your tax return/s. They will explicitly tell you about what they need information on. It might be your claimed contributions to charity. It might be about deductions you claimed. Whatever they need information about, they’ll send you a letter through the mail knowing that they need more information and they will straightforwardly tell you what to send back to them. Usually it’s documentation proving that what you claimed on your taxes is what you actually spent money on.
Step one is the easy part if you’ve only claimed things that you can show documentation for. If you claimed you bought a desk, you can photocopy the receipt, send it back in, and wait for the IRS response. If the IRS gets this information in a timely manner and it’s legitimate, you might be off the hook at this point. Rarely will they go beyond this point if everything seems legitimate in the documents you mail back to them.
The next thing you can do to fend off additional unwanted attention is to simply PAY for the portion you claimed that you can’t provide records for. Sometimes the IRS will conclude things if you repay the amount you just don’t have records for. At this point, the audit will end completely and you’re done. Unfortunately, if the amount was a large one and you simply don’t have the money to repay, things become a lot more stressful and this is where you’re going to need to hire a lawyer.
Hiring a lawyer
Audits are one of those things in life where you’re going to need a lawyer unless you can immediately send the IRS the documents they’re requesting with no troubles OR you can repay the amount that you couldn’t find documentation for. When there’s a large amount you have to repay, everything gets scary, and that’s understandable. No one wants trouble with the IRS and it can be frightening to not know what to do if you can’t find your records or simply didn’t bother to keep good records because you took your chances on never getting audited.
All is not hopeless. When you hire a lawyer, you have an invaluable professional on your team who can direct you in all the next steps to take. If the IRS decides to file charges on any type of tax fraud stemming from your audit, you’ll go into battle with a veteran lawyer by your side who is ready to help you weather the storm. Tax lawyers are very understanding people and they know the stress their clients are under to provide documents and/or money back to the IRS to prevent further investigation. They have flexible payment plans that can help you fend off prosecution or if you’re prosecuted, they can help you weather the storm and get the best possible outcome for your scenario.
The IRS is much more flexible than people think as well. They are more than willing to negotiate with taxpayers to come up with payable payment plans. If you’re charged with crimes by the IRS, there’s no choice but to hire a lawyer. You must. These types of charges can come with hefty fines and prison time. There’s no excuse to delay calling a lawyer about a tax evasion or tax fraud charge. If you don’t, you’re playing with fire and facing potential prison time. The IRS has good lawyers on its side. Make sure they’re on your side, too.
How to Handle an Allegation of Tax Evasion from the IRS
A person or company can be guilty of tax evasion if they attempt to avoid paying the total amount of taxes they owe the government. This could involve not reporting all income, failing to file tax returns by the due date, misrepresentation of tax deductions, inflating or falsely claiming donations to charity, underreporting the value of an estate as well as paying employees in cash to avoid paying payroll taxes and more. The penalties associated with tax evasion can be severe.
The Internal Revenue Service (IRS) estimates that three percent of individuals in the United States do not file any type of tax return. A person who does this can be given both civil and criminal penalties. It is often determined by the amount of tax a person owes the government. Should a person not owe any taxes, the penalties for not filing a tax return are not serious. Should a person not file a tax return in a year where they owed taxes, and especially if they owed significant taxes, they could be charged with a criminal act. Each year a person or company does not file a return when they are legally required, they could experience a fine of as much as $25,000 and incarceration for up to twelve months. Should the IRS be able to prove a person or business intentionally did not file a return to evade taxation; they can be charged with committing a felony. If the IRS can prove these charges, a conviction could involve as much as $100,00 and up to five years in prison.
Avoiding Penalties For Tax Evasion
The punishments the IRS can give are meant to deter companies and individuals from committing tax evasion. When it has been proven someone has committed this type of tax crime, they may be given a chance to avoid the most serious penalties. This could simply involve filing a late or amended tax return. The IRS has a history of being lenient toward people and companies who file a late or amended tax return on their own. Should the IRS be forced to compel a person or company to file these types of returns, they could be given any or all the penalties associated with committing tax evasion.
A person or company will be notified by the IRS if they are suspected of committing tax evasion. They will be contacted by letter, telephone call or a personal visit. In some situations, an IRS agent can give penalties right way or notify the Criminal Investigation Division (CID) of the IRS to immediately start an investigation. The CID knows how to perform a thorough tax investigation. It has the legal authority to contact a person’s friends, neighbors, employers, coworkers as well as spouse and more concerning the alleged tax evasion. They can also legally tap a phone to track money going to an offshore account. Their goal will always be to prove a person or company had more income than was declared and they knowingly tried to evade paying their tax obligation on it.
When the IRS suspects a company or individual of committing tax evasion, they will carry out an investigation to identify if the allegations are valid. They will try and determine the correctness of any tax return that has been submitted to them. They will obtain any and all tax returns associated with the person or company. Once a person has been contacted by the IRS, they may be asked to provide records, books, papers and other documentation that could prove the tax return they submitted is correct. The IRS does not have the legal authority to prosecute crimes. It can only give monetary penalties and demand a person or company pay their tax obligation. This IRS annually performs random audits to determine rates of noncompliance.
The best way for a person or company to avoid punishment for tax evasion is by coming forward and admitting their mistake to the IRS. They can them willfully provide amended tax returns. This will assure them the IRS won’t try and build a case for criminal charges. When this is done, the fines are often lower. Should someone be in a very difficult situation, they may need the help of an experienced tax attorney to obtain the best possible outcome.
Spodek Law Group have offered me excellent support and advice thru a very difficult time. I feel I've dealt with someone who truly cares and wants the best outcome for you and yours. I'm extremely grateful for all the help Spodek Law Group has offered me. I can't recommend them enough.
Spodek Law Group was incredibly professional and has given me the best advice I could wish for. They had been helpful and empathetic to my stressful situation. Would highly recommend Spodek Law Group to anyone I meet.
Best service I ever had. Todd is absolutely class personified. You are in the safest hands with spodek. They have their clients interest in mind.
We provide superior service, excellent results, at a level superior to other criminal defense law firms. Regardless of where your case is, nationwide, we can help you.
"Spodek Law Group have offered me excellent support and advice thru a very difficult time. I feel I've dealt with someone who truly cares and wants the best outcome for you and yours. I'm extremely grateful for all the help Spodek Law Group has offered me. I can't recommend them..."David Bruce
"Spodek Law Group was incredibly professional and has given me the best advice I could wish for. They had been helpful and empathetic to my stressful situation. Would highly recommend Spodek Law Group to anyone I meet."Rowlin Garcia
"Best service I ever had. Todd is absolutely class personified. You are in the safest hands with spodek. They have their clients interest in mind."Francis Anim
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