Tax Fraud Lawyers

An Overview of Tax Fraud

An individual or business that intentionally gives out false information in order to avoid paying taxes completely or reduce the amount that they owe has committed to tax fraud. Tax evasion is often referred to as tax fraud. However, there are numerous other ways that people can commit tax fraud, including the following.

Putting the Wrong Information on Your Tax Return

You will have to be cautious while you are doing your taxes. You have to make sure that everything you fill out on the application is correct. Many people use tax preparation software in order to do their taxes. This software is designed to help catch errors. However, it may not catch all of the errors that you make. That is why it is a good idea for you to consult with an accountant when you are doing your taxes.

Falsifying Your Records

If you are working with an accountant, then they will ask to see a copy of your records. They will also ask you to fill out a questionnaire. If you falsify any of this information, then you can be charged with tax fraud.

Under-Reporting Your Income

The amount of taxes that you have to pay is largely dependent on the amount of money that you make. That is why it is common for people to under-report their income in order to save money. Keep in mind that you are required to report all of the income that you make if it is over $600. This means that if you have made money doing side jobs, then you will have to report this income.

Underpaying Your Taxes on Purpose

Your accountant or the software that you use to do your taxes will tell you how much you have to pay. If you do not pay this amount, then you may be charged with tax fraud.

Why Is Tax Fraud A Problem?

There is a reason that tax fraud is often punished harshly. The government needs money in order to run. Most of this money comes from the money that people pay in taxes. When people do not pay their taxes, this costs the government millions of dollars every year.

Possible Penalties for Tax Fraud

There are civil and criminal penalties for tax fraud. If you are charged with a civil crime, then you will likely have to pay a fine. You can face prison time if you have a criminal charge.

Even if you only have one tax fraud charge, you can still face a lengthy prison sentence. In fact, it is possible for you to spend over five years in jail for tax fraud charge. The fines you are required to pay for tax fraud can be steep. People who are charged with tax fraud can be forced to pay up to $250,000. Businesses could be required to pay up to 500,000.

You may also be required to pay restitution. It is important to note that this is separate from the fines that you pay. You will have to pay restitution to the federal and state government.

Additionally, you may be put on probation. A probation sentence will typically last one to three years. If you do not comply with the terms of probation, then you will likely be put on probation longer. You may also have to pay a fine or spend time in prison.

Why You Need a Tax Fraud Attorney

Your tax problems can get you into a lot of trouble. That is why if you have received a notice from the IRS, then you will need to call an attorney as soon as possible. Your attorney can develop a defense strategy.

Possible Tax Fraud Defenses

There are several elements that have to be present in order for you to be convicted of tax fraud. The prosecution has to be able to prove that you intentionally engaged in fraudulent activity while doing your taxes. They also have to be able to prove that you were aware of the fact that you provided incorrect information. Possible tax fraud defenses include the following.

• You did not willfully commit fraud.
• There is not enough evidence to prove that any fraud occurred.
• You are not required to pay anything to the IRS.

Attorneys Can Resolve Serious Tax Problems

It is natural for you to feel nervous when you get a letter from the Internal Revenue Service. However, you can put your fears to aside when you hire an attorney. Your lawyer can help you resolve the tax problems that you have. The government has to be able to build a strong case. They will do everything that they can to punish you as harshly as possible.

Your attorney will let you know about the rights that you have. They will also make sure that you understand all of the laws.

The Power of the IRS and the Importance of Hiring a Tax Attorney

The Internal Revenue Service (IRS) is one of the most powerful agencies in the federal government. If you receive a notice that the IRS is auditing your finances, it’s natural to feel anxious about the potential consequences. Audits can have serious financial and personal implications, including the requirement to pay back taxes with interest. In some cases, if the IRS believes you willfully evaded taxes, they may even pursue criminal charges against you.

Given the complexity of audits, it is crucial to consult with an experienced tax attorney. Attorneys can assess your financial situation and explain the severity of potential penalties. Instead of immediately complying with the IRS’s instructions, it is advisable to seek legal advice promptly. A tax attorney can help you navigate the process and avoid falling victim to fearmongering tactics sometimes employed by the IRS.

Defense Strategies and Services Offered by Tax Attorneys

Each audit situation requires a unique defense strategy. Individuals and businesses will have different defenses, and a tax attorney will carefully examine the case facts to develop an appropriate defense. The goal is to minimize owed taxes, interest, and penalties. Additionally, a tax attorney may negotiate an extended payment plan for your owed taxes.

It is important to note that most audits do not result in criminal convictions. The primary objective of the IRS is to collect the taxes owed. However, if criminal charges are filed, there is typically substantial evidence indicating the defendant’s guilt.

During an audit, the IRS has access to significant resources. In criminal cases, it is essential to work with a tax attorney rather than a Certified Public Accountant (CPA). While CPAs can assist with tax compliance, they may not possess the legal expertise required to develop an effective defense strategy. In some instances, your tax attorney and CPA may collaborate on your defense.

Tax attorneys offer services similar to CPAs, such as ensuring legal compliance in complex tax situations. They can also act as your legal representative during an IRS or state government audit. Certain individuals may be at a higher risk of being audited, such as those who live in one state but work in another. Audits can also result from basic clerical errors or misunderstandings at the state or federal level.

Given their familiarity with the federal and state systems, tax attorneys can guide you through this complex process. They will represent you when discussing your finances with the IRS and provide advice if you need to communicate directly with the IRS. Their primary objective is to minimize the potential financial and personal harm caused by an audit.

Negotiating Tax Debt and Exploring Alternative Options

If you owe a significant amount of back taxes to your state or the federal government, a tax attorney can assist in negotiating your case. They can explore alternative methods of collection that may help reduce your overall tax liability. However, many individuals are unaware of the alternative options offered by the IRS.

Some potential options include:

• Making an offer in compromise, allowing you to pay only a portion of the outstanding debt
• Being placed on a non-collectible list, where you will not face consequences for not paying your debt
• Filing for bankruptcy related to tax issues
• Establishing a payment plan to pay your taxes in installments instead of a lump sum

If you are placed on a non-collectible list, you may be required to pay additional interest for the period during which you are not making payments. However, this option allows you to defer payment for a certain period of time.

Understanding Audits and Red Flags

It is important to note that the reason for being selected for an audit is not always malicious. In fact, over 95 percent of individual audits occur because a software program flagged your return based on specific criteria considered red flags by the IRS.

The IRS utilizes a scoring system called the Discriminant Information Function (DIF) to assess the likelihood of underpaid taxes. If your chances of underpayment are higher than the average taxpayer’s, you are more likely to be audited. This is true even if you have never had any tax issues in the past, and it does not necessarily mean that you owe back taxes.

Some tax attorneys hold dual certifications as both a CPA and a lawyer. This dual expertise allows them to handle both accounting needs and potential criminal penalties. If your tax situation is complex, seeking a dual-certified lawyer may be beneficial.