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1600 Locust Street, Philadelphia, PA 19103
Clients needing legal solutions for Federal Tax Fraud can connect with Brennan Law Offices, a local Pennsylvania practice.
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One Liberty Place, 1650 Market Street, Philadelphia, PA 19103
21 West Third Street, Media, PA 19063
1315 Walnut Street, 12th Floor, Philadelphia, PA 19107
2005 Market St, 29th Floor, Philadelphia, PA 19103
1735 Market St, Suite 3300, Philadelphia, PA 19103
Three Parkway, 1601 Cherry Street, Suite 1400, Philadelphia, PA 19102
1800 JFK Blvd, Suite 403, Philadelphia, PA 19103
One Logan Square, Suite 2000, Philadelphia, PA 19103-6996
1500 Market Street, 12th Floor, East Tower, Philadelphia, PA 19102
Two Commerce Square, 2001 Market Street, Suite 3100, Philadelphia, PA 19103
123 S. Board Street, Suite 1030, Philadelphia, PA 19109
Station Square Three Suite 105, Paoli, PA 19301
1001 Conshohocken State Rd, Ste 1-210, West Conshohocken, PA 19428
620 Freedom Business Center Dr, Suite 405, King of Prussia, PA 19406
747 Constitution Drive, Suite 100, Exton, PA 19341
1760 Market Street, Suite 600, Philadelphia, PA 19103
1700 Market St, Suite 1005, Philadelphia, PA 19103
1700 Market Street, Suite 1418, Philadelphia, PA 19103-3907
2 Bala Plaza, Suite 300, Bala Cynwyd, PA 19004
1110 Wellington Road, Jenkintown, PA 19046
100 Deerfield Lane, Suite 240, Malvern, PA 19355
1500 John F Kennedy Blvd, Suite 770, Philadelphia, PA 19102
1717 Arch St, Suite 3910, Philadelphia, PA 19103
920 North Broad Street, Suite 8, Lansdale, PA 19446
Frederick Federal Tax Fraud Information
Lead Counsel independently verifies Federal Tax Fraud attorneys in Frederick and checks their standing with Pennsylvania bar associations.
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What Constitutes Tax Fraud?
Tax fraud involves the willful failure to pay taxes. According to the Internal Revenue Service (IRS), tax fraud is an intentional wrongdoing by the taxpayer, with the intent to evade paying taxes owed through misrepresentation of material facts. Tax fraud requires an intent to commit fraud or evade tax payment. Making a mistake on your tax forms or filing your taxes late are generally not considered fraud.
There are many ways a taxpayer can commit tax fraud. Common types of tax fraud may involve:
- Failure to report income
- Failure to file a tax return
- Filing a false return
- Assisting others in committing tax fraud
- Failure to pay employment taxes
- Fraudulent accounting to avoid taxes
- Overstating deductions
- Hiding money in offshore accounts
- Making fraudulent deductions
How Does the IRS Investigate Tax Fraud?
The IRS has a Criminal Investigation Division to conduct criminal investigations for tax fraud. There are several ways the IRS can be alerted to possible fraud. Tax fraud can show up when investigators are looking into other federal crimes, like money laundering or wire fraud. Fraud can be identified through computer algorithms that look for signs of potential fraud and notify tax officials to look more closely at the taxpayer and their return. Auditors and revenue collectors may also report suspected criminal fraud.
The IRS also has a whistleblower office to take reports from the public, including employees, co-workers, neighbors, or even family members who report suspected tax fraud. The whistleblower program provides an award for between 15% and 30% of the total proceeds recovered by the IRS.
When the IRS opens a criminal investigation, they may review financial records, conduct surveillance, take out search warrants, and subpoena records from financial institutions to gather evidence. If there’s enough evidence to support criminal charges, the Department of Justice or the United States Attorney may take the case to trial.
What Is the Punishment for Tax Fraud?
Tax fraud is a criminal offense. Most tax fraud offenses are treated as felonies. For example, tax evasion under IRC § 7201 is a felony, with penalties including up to $100,000 in fines (up to $500,000 in fines for corporations) and a jail sentence of up to 5 years. Other felony tax fraud charges that can include federal prison time involve:
- Felony failure to collect or pay over tax
- Felony failure to report certain cash transactions
- Felony filing false tax returns
A tax fraud conviction can also result in fines, paying the legal costs for the government, and restitution.
How Much Will I Owe for Tax Fraud?
Tax fraud can result in criminal penalties and civil penalties. Penalties for a civil offense generally include fines, fees, or money damages. Under the U.S. Code, the IRS can impose a fraud penalty of 75% of the portion of the fraud underpayment added to the tax. For example, if a taxpayer fraudulently underpaid $40,000 in taxes, the IRS could add an additional $30,000 fraud penalty, for a total of $70,000 owed.
How Far Back Can the IRS Go In Tax Fraud?
The IRS generally does not go back more than 3 years to audit federal tax returns. If there is a substantial error, the IRS may be able to go back 6 years. However, there is no time limit in cases of tax fraud. If the IRS identifies fraud in the tax filings of a 30-year-old corporation, the IRS could go back 30 years to collect fraudulent underpayments and any additional penalties.
When Should I Hire a Tax Fraud Attorney?
The time to think about hiring a tax fraud attorney is when you learn about a possible IRS criminal investigation. You may not want to wait until fraud charges are filed. Having a tax attorney represent you during the investigation may be able to help you avoid saying the wrong thing that could end up being used against you.
Can a Tax Attorney Negotiate With the IRS?
There are several ways a tax attorney can help you in a tax fraud case. Even before the case goes to trial, your criminal defense attorney can negotiate with the IRS. Your attorney may be able to negotiate an agreement to pay a set amount of taxes on a payment plan and avoid criminal charges. A tax lawyer may also be able to negotiate to reduce the charges, accept a lesser offense, and avoid jail time.
If you do not want to take a plea agreement, you can still take your case to court. There may be strong legal defenses in your case, to help you avoid a criminal conviction. The prosecutor has the burden of proving every element of the federal offense, beyond a reasonable doubt. If your tax lawyer can introduce a little bit of doubt into the minds of the jurors, you should not be found guilty. Possible defenses to tax fraud charges may include:
- Defendant had a good faith belief that they filed correctly
- Tax errors were committed by mistake or clerical error
- Defendant had no intent to defraud the government
- Evidence was collected through an unlawful search in violation of the defendant’s constitutional rights