The Internal Revenue Service (IRS) works on the premise that taxpayers voluntarily comply with its rules. You are expected to file and pay your tax bill annually, and those who do not can be subject to investigation, from an audit to a criminal one, although most are overwhelmingly a civil matter.
However, if you make a serious mistake on your returns, fail to file them, or fail to pay what is due, you could face civil and criminal penalties. The IRS or the Department of Justice may contact you and initiate a criminal investigation, but if you are in arrears before IRS agents contact you or you have just been notified you are under investigation, a Phoenix tax fraud and evasion lawyer may be able to resolve it for you at an early stage. Contact our law firm to speak with a seasoned tax controversy attorney.
How is Tax Fraud Defined?
The IRS considers tax fraud as an intentional act to avoid paying your taxes, and they begin investigating it as a civil matter when they originally spot errors in a return you file. If they are suspicious of fraud, the Criminal Investigation Division (CID) dispatched special agents to look into it by potentially visiting your home or business to talk to you and ask for tax documentation.
Interest peaks if there are certain badges of fraud, like if agents find two sets of books for your business, you overstate deductions, income is not reported, or you fail to file returns for several years when there is evidence your income is substantial. These and other warning signs are codified in the Internal Revenue Manual (IRM) under IRM Section 25.1.2.3.
If a cursory investigation uncovers these signs, the CID agents will recommend whether to initiate prosecution by the Department of Justice (DOJ). When you learn the IRS has you on its radar, a Phoenix tax fraud and evasion attorney can intercede and negotiate solutions that are less severe than if you ignore the problem.
Signs a Civil Matter Turns Criminal
The IRS may not be forthcoming and announce you are under criminal investigation, but there are some signs you can look for that indicate it. You may have worked with an agent auditing your tax returns as a civil matter and suddenly they end the investigation and do not issue a report. Communications might suddenly stop, or you or someone with knowledge of your financial picture is contacted by a special agent. It is imperative at this reckoning that you contact a tax fraud and evasion attorney in Phoenix to protect your rights and negotiate a suitable solution. Our attorneys advise you to remain calm and be proactive by contacting us for a confidential consultation from anywhere in Arizona.
Penalties for Tax Fraud and Tax Evasion
The United States Code lays out the penalties for tax fraud and evasion, but keep in mind that our attorneys can intercede prior to any punishment to right the course of your investigation. Under 26 United States Code § 6663, if the IRS determines you have knowingly and fraudulently underpaid your taxes, a civil penalty of 75 percent of the underpayment will attach.
One of the most widely used statutes federal prosecutors rely on is 26 U.S.C. § 7201, which criminalizes overt acts a taxpayer intentionally engages in to avoid paying taxes: in other words, tax evasion. The prosecutor must prove intent to evade taxes, and if they do, the penalty can include a five-year prison sentence and fines of up to $100,000. A Phoenix tax fraud lawyer could circumvent these harsh results, but it is imperative to contact us as soon as you realize the IRS has targeted you.
Get Help Now From a Tax Fraud and Evasion Attorney in Phoenix
If the IRS accuses you of tax fraud or purposely neglecting to pay what they say you owe, there are several strategies we can employ to exonerate you or resolve the dilemma.
Calling us is an impactive first step toward fixing your problems. We can identify how you became exposed to scrutiny and craft solutions to the problem. Resolving IRS tax issues is what we do, and a Phoenix tax fraud and evasion lawyer can advocate four you now.
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