Tax fraud, or simply tax evasion, is the criminal act of avoiding or deliberately falsifying the preparation of your taxes to the United States Internal Revenue Service (IRS). Tax fraud is a severe legal offense that carried a wide array of stiff implications for the offender. This is where our criminal defense law firm can help.
In the broadest sense, many individuals that commit tax fraud aren’t punished with the fullest extent of the law, while others are given harsh punishments. The U.S. government must prove that an individual criminally ignored or falsified their tax information in order to press for prosecution. Therefore, it’s possible to receive legal assistance to battle any claims of tax fraud from a qualified attorney.
Nonetheless, it’s paramount to fully understand the consequences of tax fraud if you are eventually convicted. Read on to learn more about the consequences of tax fraud to properly prepare yourself for your tax fraud case.
You May Not Be In Danger of Prosecution
Tax fraud is a serious crime, albeit the offense isn’t prevalent among single individuals. According to the IRS, only 17% of individuals fail to comply with the standard tax code. In fact, the IRS has also maintained that tax fraud convictions are generally rare in most cases.
Mind you, individual taxpayers are still responsible for a majority of tax fraud crimes, rather than corporations. Nevertheless, if you believe that you are in danger of prosecution for tax fraud, your stress may be misguided. Tax fraud convictions are rare, at least statistically at any rate. However, you may be receiving fraudulent calls from scammers claiming to be the IRS, accusing you of committing tax fraud.
Overall, the standard rule of thumb is to ignore all calls from these scammers. The IRS will never call you.
Typical Tax Fraud Punishments
Tax fraud is a very in-depth criminal defense and has a variety of punishments, as a result. If you are being charged by tax fraud from the IRS, here are a few punishments you can expect if you are found guilty.
● The Overall Attempt to Evade or Defeat Paying Your Taxes: If convicted, the taxpayer will be guilty of a felony and is otherwise subject to all penalties permitted by law. In addition, the taxpayer may be liable to receive imprisonment for no more than five years, a maximum fine of $250,000, or both penalties plus the cost of prosecution.
● Fraudulent or False Tax Statements: If convicted, the taxpayer will be guilty of a felony and will be subject to no more than three years of imprisonment, a maximum fine of $250,000, or both penalties plus the cost of prosecution.
● Willful Failure to File Tax Statements: This situation entails not only the willful failure to file tax statements, but also punishes taxpayers who fail to supply proper tax information at the requested times according to law. This crime is punishable by no more than one full year of imprisonment, a maximum $100,000 fine, or both penalties plus the cost of prosecution.
As you can see, each of these particular situations carries varying punishments. The IRS can call for your prosecution if they collect enough sufficient evidence that proves any of the cases above. Moreover, if you are found guilty of any of the crimes listed above, you’ll owe a significant amount of back taxes that you will be forced to pay to the IRS.
Fraud vs. Negligence
Honest mistakes happen, and the IRS will usually forgive any small error made on tax returns. Generally, the IRS can distinguish any errors resulting from negligence versus a pure intent to evade the tax law.
Tax auditors will usually look for fraudulent or suspicious activity that includes:
● An excessive overstatement of exemptions and deductions
● The falsification of tax documents
● The transfer or unlawful concealment of income
● The falsification of business assets as personal assets
● Using an incorrect Social Security number
● Claiming an unlawful exemption for a non-existent dependant, such as a minor
● Underreporting income willfully
If the IRS detects these forms of suspicious activity, they will charge you with tax fraud if they can gather sufficient evidence.
Who Will Pursue The Charges?
The IRS is only involved in its basic operations of collecting taxes from U.S. citizens. When the agency realizes that a taxpayer is involved in tax fraud, they will employ the IRS Criminal Investigation (CI) branch to prosecute the guilty individual. CI agents personally investigate tax crimes and will go through great lengths to punish whoever is responsible.
However, the U.S. tax system relies on the fundamental value of “voluntarily compliance,” punishable self-assessed fines. Still, the IRS will attempt to discourage potential violators by flaunting imprisonment and hefty fines.
Who Usually Commits Tax Fraud?
The usual violators of tax fraud are service workers paid completely in cash, primarily because it’s often easy to underreport income based solely on cash.
Interestingly, car dealers, lawyers, accountants (go figure!), and store and restaurant owners are consistently ranked as the top offenders of tax fraud. Specifically, these individuals commonly underreport cash income.
Will I Need Legal Assistance?
If you have been charged with tax fraud, you could face a cascade of issues that could result in serious fines and possible prison time. Therefore, it would be in your best interest to discuss your possible options. Although you are essentially up against the IRS, with the right legal representation, you could fight for reduced charges or have the charged dropped if you truly are innocent of tax fraud.
Hence, if you want to rid yourself of your tax situation, consult with your attorney on how you can defeat the IRS and your charges in court. Overall, a premier attorney is your best solution to maintaining your innocence and freedom.
Have you been charged with tax fraud? If so, please consult the top-rated criminal defense lawyers at Hutchinson & Huffman, P.A. to learn more about how you can fix this problematic situation. Click here to call us for your free initial consultation and place our brilliant team in your corner. As we have done for a countless amount of our previous clients, we will secure positive results on your behalf.