IRS Tax Fraud and Tax Evasion: Facing the Penalties

 Posted on November 17, 2017 in Taxation Law

Benjamin Franklin once said that nothing in this world is certain except death and taxes. This common saying is as true today as it was 200 years ago—paying taxes is a civic duty that is required of everyone in the United States. However, people often attempt to cheat on their taxes and avoid paying what they owe, and this can result in serious consequences. If you are facing a tax audit, you should understand the potential consequences of tax fraud or tax evasion.

IRS Tax Fraud Penalties

Tax fraud can take a number of different forms, including:

• Attempt to evade or defeat tax - This can include underreporting income, claiming improper deductions, or underreporting the value of an estate.
• Willful failure to collect or pay over tax - Employers commit this type of fraud when they do not correctly collect payroll taxes, or when they pay employees in cash to avoid paying payroll taxes.
• Willful failure to file return, supply information, or pay tax - Failing to file a tax return and pay taxes owed on time can result in penalties.
• Fraud and false statements - People can be penalized for falsifying any information on their tax return, and advisors or tax preparers can also be guilty of tax fraud if they advise someone to make any false statements.

In addition to being required to pay taxes owed and interest, people who commit tax fraud may face civil penalties of up to 75 percent of the amount of taxes that were underpaid. Since tax fraud is a felony, perpetrators may also face criminal charges, which can result in up to five years in prison and $250,000 in fines for individuals, or $500,000 for corporations.

Contact a San Francisco Bay Area Tax Attorney

When you are facing possible consequences for tax fraud or tax evasion, a skilled tax attorney can help you understand your options and work to minimize the penalties. If you can demonstrate that underpayment of taxes occurred due to an error rather than fraud, you may only be required to pay a 20 percent penalty rather than facing civil and criminal penalties.

If you are being audited by the IRS, you should contact John D. Teter Law Offices as soon as possible. We can help you address any charges of tax fraud and work to reach a resolution to your case that will allow you to address your tax issues with minimal financial hardship. Contact a San Jose, CA tax fraud attorney at today at 408-866-1810.

Sources:

https://www.irs.gov/compliance/criminal-investigation/related-statutes-and-penalties-general-fraud

https://www.irs.gov/compliance/criminal-investigation/civil-and-criminal-penalties-abusive-tax-schemes