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 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’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 over your case and see whether it should be sent for criminal prosecution. Typically, 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 severe. You could get up to five years in jail, plus fines of $500,000, plus the expense of prosecution for each tax offense. When the criminal tax case is completed 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 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. 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.
If you have one of these problems and are audited by the IRS, you may 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 lawyers 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 real mistakes in reporting tax information to the IRS. Tax offenses are some of the most frequent white collar crimes, which impacts business professionals and ordinary Americans. Overstating deductions, failing to file taxes, or underreporting income are grounds for audits. If the IRS finds cause after someone to prosecute falsifies their tax report – the IRS will greatly investigate.
If you have been audited or investigated on charges of tax fraud, you should find a skilled tax attorney to handle your case. Tax fraud is a serious charge. If you are convicted, you could wind up doing several years in prison and ordered to pay fines that could run into the thousands of dollars. You should enlist the help of a tax attorney as soon as you know that you are being charged. If you go into a hearing alone or speak with an IRS auditor without benefit of an attorney, you could incriminate yourself.
When it comes to tax fraud, never go it alone. A seasoned tax attorney can look over your case and give you an honest assessment of what you will likely face. Your tax lawyer is skilled and versed on every aspect of tax law. They will be your advocate from start to finish. They will ensure that your rights are protected and prevent anxious prosecutors from throwing the book at you.
There are many issues that can trigger a tax fraud charge. Here are a few:
If a prosecutor feels you are guilty of these charges, they will not stop until they secure a conviction. A skilled tax attorney may be able to keep you out of prison. It is also possible that your fine can be vastly reduced. This is an issue that you cannot navigate alone. Enlisting the help of a seasoned tax attorney is the only way to keep you from feeling the brunt of the Department of Justice.
Get a tax attorney today. All consultations are free.
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