Tax evasion is a very serious offense and is also referred to as tax fraud. It is never a good idea to try to avoid paying the taxes that you owe because you can find yourself convicted of a felony and in jail for up to five years. In addition, you could end up paying a fine of up to $250,000 as an individual taxpayer or $500,000 as a corporation. If you are found guilty of willful failure to file a tax return or pay the tax that is due, you could be facing a misdemeanor conviction that carries a prison sentence of up to one year. You could also be forced to pay fines totaling up to $100,000 as an individual and $200,000 as a corporation. According to reports from the IRS, about 17 percent of individual taxpayers fail to follow the tax code in one way or another. This is a fairly high percentage of the population that is susceptible for investigation for tax fraud.
There are many cases in which a taxpayer’s failure to obey the tax code is merely a mistake and not a willful violation. The IRS has well-tested programs to figure out which types of violations are genuine mistakes and the ones that merit criminal prosecution. You do not want to find yourself in the latter category because the government is fairly aggressive at investigating and prosecuting tax fraud. This is because the government wants to deter as many taxpayers as possible from being tempted to avoid reporting income or underpaying their taxes.
If you are engaged in overstating the number of exemptions or deductions that you are entitled to take, this could be a red flag for the IRS that you are trying to evade paying taxes. In addition, if you earn your income mostly in cash, this is another typical situation in which the IRS has found that taxpayers are tempted to go without reporting their income to the government. Tax fraud and evasion are investigated by the law enforcement department of the IRS, the IRS Criminal Investigation (CI).
Aside from getting together all of your documents, the first thing that you should do when faced with an investigation for tax evasion is to contact a licensed attorney. Yo should work with a tax evasion lawyer who regularly handles these types of cases and will be able to explain all the complexities to you of how the IRS works. The more information that you can discuss with your tax attorney, the better. You want to be fully informed of the process that the IRS will put you through and the potential pitfalls along the way. Whether you own a business or file taxes as an individual, the consequences of being convicted of tax evasion are severe. This can follow you around for the rest of your professional and personal life if not dealt with in a proactive way.
Do not be afraid of speaking with a tax evasion attorney to discuss your outcomes. Even if you think you will be convicted of tax evasion, it is better to have an experienced representative negotiating on your behalf with the IRS. Anything that you say to the IRS could be used against you, which is why it is preferable to streamline all of your communications through an attorney. Do not make the mistake of thinking that this problem will simply go away on its own no matter how badly you want it to. The sooner you get a plan in place to deal with your tax evasion charge, the quicker your life will get back to normal.
In many 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, along with a late filing penalty, and charge interest on all the above. In a tax audit, even if 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 specialist to look at your case and see if it should be sent for criminal prosecution. Normally, this specialist has experience and will seek advice of the IRS’ tax fraud attorney for help if it appears necessary.
The penalties for tax fraud are severe. You could get up to 5 years in jail, plus fines of $500,000, in addition to the expense of prosecution for each tax offense. Once the criminal tax case is completed by the IRS criminal unit, it will be referred back to the IRS Examination Division in which the taxes are assessed. The IRS can add the civil tax fraud penalty on top of the criminal tax fraud penalties. It’s important to know 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 assessing whether fraud occurred, such as: understatement of income, inadequate records, failure to file, hiding assets, dealing in cash, failure to make estimated cash payments, failure to cooperate with authorities, failure to make payments.
If you have any of these problems and are audited by the IRS, you might need a tax fraud attorney. Actions you take during a tax audit can transform a normal tax audit into a tax fraud case. By way of instance, lying or giving false answers to IRS investigators, delaying the investigation, or other actions to mislead IRS agents can indicate fraud.
Experienced tax fraud attorneys 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 genuine mistakes in reporting tax information to the IRS. Tax offenses are a few of the most frequent white collar offenses, 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 heavily investigate.
Submit your review
Todd and his team are amazing attorneys who are very diligent,and excellent at helping consumers.
Todd is a miracle worker who will work tirelessly for you and your family. He is one of the few attorneys i've met - who I earnestly trust to protect me, and who I am happy to refer to our friends and fellow family members. The Spodek Law Group is someone you want on your side, because they will treat you just like family. Todd and his team are available 24/7, and they always answered our calls. Even when we were being irrational, and crazy - they were calm and super helpful. Just call Todd. He gives you a free consultation and is very understanding.- Donna & Robert
85 Broad Street, 30th Floor
New York, NY 10005
35-37 36th St,
Astoria, NY 11106
195 Montague St.
Brooklyn, NY 11201