Payroll tax fraud is the intentional misrepresentation or reporting of false or inaccurate wage income information to the Internal Revenue Service (IRS). Payroll tax fraud is also characterized as tax evasion, due to the reporting party’s effort to evade paying the appropriate tax amount. Payroll tax fraud can be committed by either an employee or an employer. The allegation of tax fraud is very serious and the consequences of being found guilty of the same can range in severity from penalties and fines, to criminal charges and incarceration. If you are involved in a situation pertaining to payroll tax fraud it is imperative that you speak an attorney who is experienced in this area of law, as soon as possible. Here, are a few examples of payroll tax fraud, and what to do if you are confronted with this legal issue.
1. Payroll Fraud Committed by Employees
Employees have been accused of committing payroll fraud by altering payroll records for their own benefit or for the benefit of another employee. In other instances, payroll managers and other employees in charge of payroll have been accused of creating false employees for the business they work for in order to receive the fake employees wage earnings. Although there are far more examples of payroll fraud schemes occurring in the work place, it is important to know that the allegation of payroll fraud is very serious and should be considered so in your determination whether you need legal representation.
2. Payroll Fraud Committed by Employers
Employers also find themselves on the wrong side of allegations regarding payroll fraud. For example, it has been alleged that employers have filed false payroll tax returns, or have filed false or inaccurate W-2 statements for their employee(s) in an effort to evade paying appropriate taxes. The impact of an allegation of fraud for any business can be detrimental both to the business reputation, and to the business financially given the potentially severe consequences of being found guilty of payroll tax fraud.
3. Speak with a Lawyer
Whether you’re an employer or an employee involved in allegations of payroll fraud, it is prudent that you speak with an attorney as soon as possible. In consulting with an attorney, you can determine if your issues require legal representation. If so, your attorney can immediately take measures to protect your interests and rights. Although there are many general practice attorneys who can represent you in court on allegations of fraud, there are many challenges to a case involving payroll fraud. Therefore, it is important to consult with and retain an attorney or law firm that is specifically experienced in this area of law and litigation.
4. Gather Evidence and Information Relevant to Your Claim
Once you have retained legal counsel, it is imperative that you and your attorney work together to obtain all relevant documents and information necessary to support your position or allegations. Having all of the information and evidence compiled in the early stages of litigation or settlement discussions, is extremely important. Not only does it give your attorney the confidence he or she needs to represent your claim effectively, it also gives your attorney the possible leverage he or she needs to steer the other side into settlement rather than protracted litigation.
5. Next Steps
If you and your attorney are unable to gain the other sides cooperation in settling the matter outside of court proceedings, than you and your attorney can discuss the next steps necessary in order to resolve the issue most effectively. If criminal fraud charges have been filed in your case your lawyer can speak with the district attorney and Judge directly on your behalf.
Dealing with your current or former employer, or your current or former employee, regarding payroll tax fraud allegations can be a daunting task. Matters are further complicated if the district attorney has filed criminal charges. In either situation your best option is to have an experienced payroll tax attorney on your side.
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