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.

What is Tax Fraud?

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.

Common Badges of Tax Fraud

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:

  • Understating income
  • Accounting irregularities
  • Missing tax returns
  • Two sets of accounting books
  • Implausible explanations of behavior
  • Dealing in cash

Taxpayers should always take care to avoid these practices and reduce the risk of an investigation in the future.

Penalties for Tax Fraud

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.

Criminal Tax Fraud Penalties

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 Fraud Penalties

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.

Contact a Vienna Tax Fraud and Evasion Attorney Today

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.

Attorney John Pontius

Pontius Tax Law, PLLC is a tax law firm that strives to resolve sensitive tax problems through trust, dedication and value. The law firm was founded by John Pontius with offices in Washington, DC,  Rockville, MD, Bethesda, MD, Fairfax, VA, and Alexandria, VA. Mr. Pontius represents individual and business clients with sensitive and serious tax matters before the Internal Revenue Service and state taxing authorities. His client base is local, national, and international.

Over the course of his career, Mr. Pontius has represented businesses and individuals with complex tax issues in the following areas: FBAR examinations, offshore and domestic disclosures, FATCA, FIRPTA, tax planning, unfiled tax returns, release of tax liens and levies, trust fund recovery penalty, IRS and state audit examinations, as well as appeals, penalty abatement, U.S. Tax Court litigation, along with defense of tax fraud and evasion. If you require assistance from a tax lawyer, contact Mr. Pontius to discuss your situation.

Client Reviews
John helped us with a DC tax audit and succeeded in getting us a "no change" final decision. The issues were related to two flow-through entities and the use of carry-forward operating losses -- something that the DC auditors struggled to understand and with which they did not have any...
Paul A
Mr. Pontius is extremely professional and was able to take care of my tax returns which includes international bank accounts quickly and at a very reasonable price. Would definitely recommend.
I received a fee this past November from the IRS for over $800 because of an error I made on my 2016 taxes. I called my cousin, John Pontius, and he immediately knew what steps needed to be taken. Thanks to him, the fee was cleared. A 10 minute conversation...
As an American citizen living in the Middle East my local banker informed me that I needed to file FBARs and report my worldwide income to the IRS. Through the recommendation of another attorney at an international law firm, I was introduced to John Pontius. Mr. Pontius efficiently and effectively...
Kareem S
John handled a difficult IRS lien for my client. He was excellent in getting the lien released so we could close on the property. I would highly recommend John .
Bobbie M
We were seeking tax advice with managing two properties, LLC, as well as some future financial planning. John responded to my call in a timely manner and was happy to answer our questions while referring us to specialists who can manage our accounts on a more regular basis.
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