Any business that sells products to customers must collect sales tax. Whatever the purchase cost, there will be a small amount added as sales tax that the business is responsible for sending to the government. This tax is used for services for local citizens such as repairing roads, funding schools and waste management. Many state governments are becoming more vigilant in collecting sales tax, and if a business owner has not remitted the amount or has not collected the correct amount, he or she could be up for civil or criminal charges. If a business is to be audited for sale tax remittance, it should contact a sales tax fraud lawyer immediately.
Suspected cases of sales tax fraud are being elevated to the criminal level. If the business owner enters into a casual conversation with an investigator, it may lead to serious consequences. If a sales tax fraud lawyer is engaged, he or she can handle the investigator. Small and medium-sized business such as car dealerships and restaurants are more at risk. The audit may be a civil tax audit, but if fraud is even suspected, it can be referred to criminal prosecutors.
Some of the most common practices that may result in sales tax fraud charges are failure to collect the tax from the customer, failure to report any taxes that have been collected and failure to pay the taxes to the state.
There are different types of sales tax fraud, including:
• Sales that are not recorded in the accounting books
• Sales that are secret
• Taking some of the taxes collected and reporting the lower amount
• Giving lower sales totals
• Misrepresenting a tax exemption
• Failure to report or fraudulently reporting an out of state sale
• Tax evasion
• Creating a false set of account books
While sales tax is only a few cents on the dollar, the pennies add up to huge amounts when properly collected from all businesses. This is why the government is vigilant to get what it is owed and puts harsh penalties on those businesses that do not obey the law. If a business owner is facing sales tax fraud, he or she should get in contact with a lawyer who specializes in tax fraud. This type of case can be very complicated and lengthy, so the sooner a criminal defense lawyer is involved the better it is for the accused business owner.
The consequences of being found guilty of sales tax fraud are not small. The business owner could face up to a year or more in jail and need to pay huge fines as well as all of the back taxes. Sales tax fraud is considered white-collar crime and not violent, but the penalties can still be severe.
Once the business has a sales tax fraud lawyer working on his or her behalf, speed is the most important factor. The earlier the case is resolved, the less the damages may be. The lawyer will:
• Assess the business’s financial situation quickly to get all the facts
• Contact the Criminal Investigation Division or the civil investigator of the Internal Revenue Service (IRS) who may want to make the case criminal and not civil. It is important to keep the case a civil one
• Interview the agent in charge of the investigation to learn what they know about the case and how they plan to proceed
• Steer the case in a positive direction
Sales tax fraud lawyers know that any resolution is better than prison time for the business owner. If there are criminal matters, they may be resolved before criminal charges are filed. This will all be done with as little inconvenience to the client as possible. A successful sales tax fraud lawyer will have excellent relationships with the state and federal government representatives.
If a business owner has a sales tax audit in his or her future, the next step should be to contact a sales tax fraud specialist lawyer. There may be many reasons why the business does not comply with the law, some of which may be the basis for a defense of criminal charges. For example, confusion about whether or not a sale is subject to sales tax or inadequate record keeping may be the difference between civil and criminal charges.
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