Tax Fraud And Evasion
Whether you face charges of tax fraud or have willfully neglected paying your taxes, when the IRS comes knocking, it is in your best interest to secure representation from attorneys who can protect your interests. We at Williams & Coleman, P.A., are those attorneys. Below is a short discussion of some of the more common tax crimes.
Tax evasion is the most frequently charged crime when it comes to federal taxes. Tax evasion is the willful attempt to evade or defeat any tax. A good-faith misunderstanding of the tax laws is a defense to a tax crime. A defendant convicted of tax evasion may be fined, or imprisoned not more than 5 years, or both, and made to pay the costs of the prosecution and any special assessments. The maximum fine is $500,000 for corporations and $250,000 for individuals.
Willful Failure To Collect Or Pay Over Tax
This crime is intended to make sure that employers appropriately collect and pay over to the government certain employment taxes. An employer who willfully fails to account for or to pay over the proper employment taxes can be charged with this crime. The penalties are similar to the ones for tax evasion.
Willful Failure To File Return, Supply Information Or Pay Tax
It is a crime to willfully fail to pay any tax or estimated tax, make a return, keep any records or supply any information required to be supplied under the tax laws. This crime is generally a misdemeanor and is most often applied to taxpayers who willfully fail to file their tax returns. A defendant convicted of this crime may be fined, or imprisoned not more than 1 year, or both, and made to pay the costs of the prosecution. The maximum fine is $500,000 for corporations and $250,000 for individuals.
The government relies heavily on the crime of willfully failing to pay any tax or estimated tax, make a return, keep any records or supply any information required to be supplied under the tax laws, when it comes to prosecuting tax protestors. Tax protestors are taxpayers who claim that the tax laws are unconstitutional or invalid. The tax laws are very much constitutional and valid, and should be treated as such by everyone.
False Returns And Preparers Of False Returns
It is a crime to willfully file a false tax return, or to assist or aid in the preparation and filing of a false tax return. A defendant convicted of this crime may be fined, or imprisoned not more than 3 years, or both, and made to pay the costs of the prosecution. The maximum fine is $500,000 for corporations and $250,000 for individuals.
Voluntary Disclosure Policy
The government has a policy that it will not prosecute certain taxpayers who voluntarily disclose their tax discretions and pay the taxes due. The voluntary disclosure needs to occur before such taxpayer is, in fact, contacted by someone from the IRS, or is likely under investigation by the IRS.
Civil Examinations Can Become Criminal Investigations
A regular civil tax examination can easily become a criminal investigation. Revenue agents are trained to look for certain badges of fraud during their examination. Should they find these badges of fraud, they are required to make a fraud referral. If the revenue agent makes such a referral, they generally discontinue contact with the taxpayer and his or her representative. If you have a concern, and during an examination the revenue agent discontinues his or her communications with you or your representative, you should consider if there has been a fraud referral.
As discussed above, if there has been multiple years of nonfiling, multiple years of unreported income, unreported offshore activity or substantial deductions claimed for personal expenses, you should be concerned about a potential IRS criminal investigation. In such a case, the sooner you can engage a tax attorney to assist you, the better.