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Philadelphia Tax Fraud Lawyers
Tax fraud and committing tax evasion schemes are serious issues that should not be taken lightly. For as many years as governments have been collecting taxes from their citizens, people have looked for countless ways to avoid having to pay for them. For those who are caught not paying what they owe in taxes when due, the penalties can be harsh. There are both illegal and legal ways to lessen what you owe to the government for your tax payment. If you use illegal means, you may end up needing a tax fraud lawyer to help you out of a sticky situation.
Some legal ways of avoiding paying as much in taxes include contributing more of your income to your IRA in the form of pre-tax payments. When in trouble for straying from accepted ways of avoiding paying as much in taxes, you may be charged with a crime for tax evasion. It is advised to hire the help of a reputable tax fraud lawyer to help represent you when investigated by the IRS.
Types of Tax Evasion Schemes That Are Common
Potential tax evasion schemes may be caught by the IRS during civil audits. In other instances, the allegations of evasion might get reported by a former spouse, a partner or a disgruntled employee. It doesn’t matter how the IRS was alerted to the schemes, they will investigate thoroughly. You will need the help of a lawyer quickly when they contact you. Below are some of the more typical schemes the IRS will prosecute for:
•Sham trusts
With these tax evasion schemes, the taxpayer will establish a new trust and then turn their family house over to it. When this is done, the taxpayer can deduct their home maintenance costs. Alternately, they might try to make it look like they gave control of their business to their trust to avoid paying business taxes. Many cases involve foreign trust shams.
•”Living out of the company”
In some cases, a business owner may try to use their company’s money to pay for personal expenses such as family vacations, traveling or home renovations. Any personal expenses would be included.
•Third-party payers/Employee leasing
This is an employment scheme for tax evasion that involves a business obtaining contracts legally using another business to manage their payroll. That company is called a leasing company. They will collect the employment taxes from the hiring company, but they will fail to pay those taxes to the IRS.
•Pyramiding
This is a type of employment tax scheme. The owner of a business will collect taxes from the employees, but they do not pay those taxes to the IRS. They instead use those taxes to pay for personal expenses or to be used for operating capital.
Countering allegations such as these will take a lot of help from an experienced tax evasion lawyer. Overcoming these types of schemes will take a lot of hard work. The best tax fraud lawyer will use defense methods that can reduce evasion charges, lessen the penalties and get cases dismissed.
If you think you may be targeted by the IRS for a federal investigation, never make the mistake of talking to the agents without hiring the help of a trusting, competent tax fraud lawyer who has special experience with these types of crimes. You must do your due diligence and find a lawyer who can give you the best outcome of your case.
Most attorneys will give you a free initial consultation to see if they would be able to help. Tax lawyers are necessary to avoid the common pitfalls that exist in IRS tax scheme investigations.
Of all types of fraud committed, IRS and tax fraud are by far some of the most serious offenses. The Internal Revenue Service and federal prosecutors will work together with the IRS criminal division to prove the charges in this type of fraud case. There are many things that qualify as fraud under tax laws, but typically the government is looking for deliberate, willful action that results in tax evasion or fraud. An IRS audit will often be performed prior to these charges being filed to determine if there is a willful case to pursue. Having a tax attorney on your side as soon as you are aware there might be an issue is critical to getting the best outcome for your case.
What Constitutes Tax Fraud?
Many fraud charges can be deemed intentional or accidental. In the case of taxes and IRS fraud, the government is only going to pursue intentional actions that result in defrauding the IRS or the federal government. Fraud can also occur at the state and local tax level, although it is much less common because these taxes are often more affordable. Illegal activities under this law include things like:
-Filing false tax returns that report lower earnings than you actually make
-Filing or submitting false documents and information
-Failure to file taxes entirely
-Failing to collect unemployment taxes
-Tax evasion, or avoiding paying taxes that are owed to the state or federal government
An IRS audit that reveals simple mistakes or carelessness usually doesn’t result in criminal charges right away. If intent isn’t obvious or can’t be proven, the IRS will usually simply attempt to collect the money that is owed, including penalties and interest. If, however, they do find intent to defraud, they could impose civil tax fines themselves, or turn the case over for criminal prosecution.
Tax Fraud as an Additional Charge
People already under investigation for other federal crimes will often be audited by the IRS or investigated by criminal prosecutors for potential tax evasion and fraud. If they can find any problems in your tax returns that point to illegal income or reporting of income, they might file additional fraud charges on top of your existing charges. If you are facing any kind of federal crime, it would be wise to ensure that your tax returns are in order to avoid further charges. A tax attorney can help you protect yourself and determine the best course of action when you are faced with a case like this.
Accidental Fraud and How to Avoid It
In some cases, you might accidentally defraud the IRS by filing your taxes incorrectly. These are the cases where they are less likely to file criminal charges, but you still need to be careful. Some examples of accidental fraud include:
-Filing a return without the appropriate forms or documentation. For example, if you take education credits on your taxes but do not know to file the Form 8863 required with those credits, you might be unknowingly committing a crime.
-Claiming the wrong deductions can be considered accidental fraud. This is especially important for small business owners and those who are self-employed, because deductions for business expenses can get tricky. If, for example, you use your personal cell phone for business, you can deduct the cost of service from your taxes. However, you cannot deduct your entire phone bill if you have other lines or family members using the service for personal reasons.
-Failure to report income, such as tips, can be constituted as breaking the law. IRS sources estimate that as much as 40% of the tips received by those in the service industry aren’t reported. They’re paying attention, so make sure you claim all tips and file appropriate paperwork with your taxes.
Call a Tax Attorney Right Away
If you are facing tax fraud charges for any reason, you need to hire a qualified lawyer as soon as possible. They can investigate the charges against you and help you come up with a solid defense so that you get the best outcome from your case. Contact our experienced Philadelphia tax fraud lawyers to learn more or to discuss your case today.
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Philadelphia Tax Evasion Lawyers
There is no legal opponent as aggressive or as well-funded as the IRS. If you have been accused of tax evasion, it is time to get help immediately from an experienced lawyer.
What Constitutes Tax Fraud?
The IRS and state tax agencies are both very strict about paying taxes. Simple math errors can lead to hundreds or even thousands in fines. If they believe you have purposely tried to avoid paying your fair share, they will pursue you relentlessly.
There are several actions that qualify as tax fraud in the state of Pennsylvania. These include:
- Not filing a return at all
- Creating a second bank account or second address to avoid paying state taxes
- Failing to withhold taxes from “under the table” employees
- Not reporting cash sales
- Using personal expenditures as business expenditures
- Selling certain goods illegally, such as cigarettes or alcohol
- Pocketing sales tax that you collected
- Using trust funds and similar schemes to avoid paying taxes
Some of these actions can be done accidentally or innocently. However, the penalties are often severe. It can be difficult to prove your innocence. You need expert help so you can build a winning case.
The Consequences of Tax Evasion
The penalties and punishments for this crime can be severe, even when the offense is relatively minor. The IRS will demand that you pay back all unremitted funds along with interest and late payment penalties. They can also charge additional penalties as punishment. In extreme cases, people who are convicted of tax evasion can spend years or decades in federal prison.
Most people have no problem with a billionaire paying fines for cheating on his taxes. However, this is not the typical person in tax court. Many of the people who are charged with tax evasion are average citizens. They may have made a simple mistake or been unable to pay their full share of taxes.
The IRS sometimes charges people with tax fraud when they have simply made oversights or math errors. They are very bad at telling when an action was intentional. However, the courts are often more lenient when you can show that the error in taxes was a simple mistake.
Defending Yourself Against the IRS
Defending yourself against the IRS legal team requires expert assistance. More importantly, it requires experts who are familiar with tax code and how to defend against allegations of tax evasion. We have handled many cases just like yours. We will fight for you and show the IRS that they are wrong. We have forensic accountants and other experts who can testify on your behalf. We know the arguments that are most likely to sway a jury to rule in your favor. If the IRS is trying to audit you, we can ensure that it is performed in a manner that protects your privacy and Constitutional rights.
Although David and Goliath is a compelling story, you do not want to go up against a giant like the IRS without the right assistance and the right tools. People who have expert tax evasion lawyers are more likely to win their case and also tend to have lower penalties when convicted.
If you have been served any kind of paperwork by the Internal Revenue Service, you need to take immediate action. Call today for a free consultation with one of our experienced Philadelphia tax evasion lawyers. We are here to help you fight these charges so you can move on with your life.