Tax season is the least favorite time of year for many people. Not only is there the task of reconciling an entire year’s worth of personal or business finances, there’s also the issue that paying tax liabilities can cause a financial strain. Many people do everything they can to reduce their tax liability. However, some of these attempts may be considered illegal and a person can easily find themselves on the bad side of the IRS.
This is the perfect time to discuss how tax fraud is defined, what the potential consequences are and what to do if you’ve been accused of a tax crime.
What Is Tax Fraud?
Tax laws are complicated, and the IRS knows this. Individuals who misinterpret tax laws and make honest mistakes with their tax returns might be concerned that they’re at risk of being charged with tax fraud. Contrary to common perception, the IRS isn’t interested in severely penalizing all errors. Honest mistakes are typically considered tax negligence rather than tax fraud. A person accused of tax negligence will need to make right on their tax debt and possibly pay fines, but they will not face criminal prosecution.
Tax fraud is a different story. Tax fraud involves the willful intent to defraud the IRS or evade the tax laws. Acts that can be considered tax fraud include failing to file income taxes, failing to pay taxes due, failing to report all income, providing false or fraudulent information on tax forms and filing a fraudulent tax return.
What to Do If You’ve Been Accused of Tax Fraud
In most cases, tax fraud is considered a felony offense. This means that penalties include fines, restitution and a term of incarceration in prison. If the IRS contacts you regarding an audit of your taxes, it’s important not to panic. Instead, treat their inquiry just as you would any other type of questioning or investigation for a criminal act.
This means cooperating with the investigation but also not answering any questions pertaining to the investigation without first speaking with a tax fraud lawyer or having them present with you during the interview. The last thing you want to do is volunteer any information to the IRS.
Not volunteering information to the IRS holds true even if you’re undergoing a simple tax audit. If you’ve been flagged for an audit, the IRS is going to conduct a very thorough review. Any information you provide can be used to further the investigation and potentially result in charges of tax fraud that would not have otherwise occurred. A white-collar crime lawyer can review your case, prepare for dealing with the IRS and possibly prevent the investigation from going any further.
Contact a San Diego Criminal Defense Lawyer
If you’ve been contacted by the IRS, it’s important that you contact a San Diego criminal defense lawyer before answering any of their questions. The IRS is skilled at producing the information they need to further their investigation and pursue tax fraud charges. The Law Offices of John D. Kirby can represent you and prepare a defense against tax fraud charges. Contact the Law Offices of John D. Kirby today for a consultation.