One of the primary roles of IRS investigators is to identify instances of tax fraud and evasion. When the IRS believes evasion or fraud has occurred, the government has the power to pursue civil or criminal penalties against the taxpayer. Thankfully, a dedicated tax lawyer could help resolve these issues with only civil penalties imposed, rather than criminal charges.
There are ways to address allegations of fraudulent tax activity without facing these steep penalties. Working with the IRS to address any controversy is best done with the help of a Vienna tax fraud and evasion lawyer.
The term “tax fraud” refers to an individual’s or business’ effort to refrain from paying some or all their tax burden. This could include personal income tax debt, as well as taxes owed by a closely-held business. The primary concern in this kind of situation is not the type of tax that needs to be paid but rather the intentions of the taxpayer.
In order for a taxpayer to have committed fraud, they must have acted intentionally or willfully. In other words, it is impossible to “accidentally” commit tax fraud. Tax fraud and evasion requires an act or series of acts that were intended or expected to evade a tax debt. This could involve ignoring the tax debt entirely or underpaying what was owed. A Vienna tax fraud attorney could work with an individual or business to determine whether their actions will be seen as willful – and if they were, then make a plan to address the situation as carefully as possible.
Fraud can occur in different ways. There are a number of signs of potential fraud or evasion, and these signs are referred to as “badges of tax fraud.” There are several badges of tax fraud that the IRS considers during the course of an investigation. Some examples include:
Taxpayers should always take care to avoid these practices and reduce the risk of an investigation in the future.
If the IRS decides to pursue a taxpayer for evasion or fraud, there are different consequences that they could apply. These consequences depend on whether the taxpayer is facing civil or criminal tax fraud charges. Ultimately, the IRS will determine whether to pursue civil or criminal charges – potentially even both. A tax fraud and evasion lawyer in Vienna could consult with a taxpayer about their level of exposure and offer options for how to reduce the risk of criminal charges.
The criminal consequences for a tax fraud or evasion conviction are similar to most other offenses. These criminal penalties often include a multiple-year prison sentence, six-figure fines, or potentially both.
Civil tax penalties differ from criminal penalties, as they do not carry the risk of incarceration. Instead, civil tax fraud penalties are strictly financial. It is important to remember that these penalties could be assessed in addition to the fines handed down in a criminal proceeding. Under the law, the penalties associated with civil tax fraud could be as much as 75% of the tax bill that the person was found to be evading.
While allegations of tax fraud or evasion are serious, it is important to remember that you might be able to address these issues without criminal charges. Tax fraud investigations can begin when a Revenue Agent (auditor) or Revenue Officer (tax collector) detect possible fraud. The IRS also receives information from the public (former spouse or business partner) as well as other law enforcement agencies. These investigations are not based on honest mistakes or misunderstandings by the taxpayer. If you are concerned about a prospective or current tax fraud investigation, the right attorney could help. Contact a Vienna tax fraud and evasion lawyer for more information.