In most tax audits done by the IRS, the agency is 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 of the above. In a tax audit, even if the IRS suspect you have 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 check at your case and see if it ought to be sent for criminal prosecution. Typically, this specialist has expertise and will seek guidance of the IRS’ tax fraud attorney for help if it appears necessary.
The penalties for tax fraud are serious. You could get up to five years in jail, plus fines of $500,000, plus the expense of prosecution for each tax crime. Once the criminal tax case is finished 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 penalties. It’s important to know that tax bills 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 cash, failure to make estimated cash payments, failure to cooperate with authorities, failure to make payments.
For those who 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 . For instance, lying or giving false answers to IRS investigators, delaying the analysis, 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 strategy.
Is Tax Fraud a crime?
Tax fraud is a frequent charge which can result from real mistakes in reporting tax information to the IRS. Tax offenses are a few of the most frequent 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 afield following someone falsifies their tax report – then the IRS will greatly investigate.
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