In most tax audits done by the IRS, the agency is only interested in collecting taxes owed, interest, and with penalties. The IRS can impose charge interest on all of the above, and a negligence penalty, in addition to a late filing penalty. 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 percent 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 over your case and see whether it should be sent for criminal prosecution. Normally, this specialist has expertise and will seek guidance of the IRS’ tax fraud lawyer for help if it looks necessary.
The penalties for tax fraud are serious. You could get up to 5 years in jail, plus fines of $500,000, plus the expense of prosecution for each tax crime. When the criminal tax case is completed 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 in addition to the criminal tax fraud fines. 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 issues and are audited by the IRS, you might need a tax fraud attorney. Actions you take during a tax audit can transform a tax audit that is normal . By way of instance, lying or giving false answers to IRS investigators, delaying the analysis, or other activities to mislead IRS agents can indicate fraud.
Experienced tax fraud attorneys can help you navigate an IRS tax audit, and help you formulate a strategy.
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 a few of the most ordinary 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 to further afield following someone falsifies their tax accounts – then the IRS will deeply explore.
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