Criminal Defense

The Crime of Filing Fraudulent Tax Reports

June 06, 2022 by Mikel Rastegar in Criminal Defense  Federal Crime  
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Filing Fraudulent Tax Reports

Each year a percentage of the US population is required to file their taxes correctly. However, it is not out of the ordinary for an individual to falsify the information on their tax reports to get a bigger refund or land themselves in a lower tax bracket.

Choosing to file a tax report with false information is considered a tax crime and can lead to civil or criminal penalties.

The Penalties For Filing Fraudulent Tax Reports

There are various ways a person can choose to falsify their tax reports. Perhaps they under-reported their income or used a false social security number when they filed their taxes. Either way, both these situations will land them in trouble. However, the type of penalty faced if found guilty of filing fraudulent tax reports will mainly depend on the severity of the tax crime.

If the tax crime offender simply made a mistake and accidentally filed a wrong report. They may only receive an accuracy-related penalty. The IRS acknowledges that filing your taxes is a complicated process that not a great deal of individuals fully understand. Thus, it is not completely uncommon for an individual to make a mistake.

As such, if the IRS catches a false document but cannot be able to prove fraud activity, they may consider it an unintentional mistake and charge the defendant with negligence rather than fraud. A negligence charge could result in a 20 percent penalty of the portion of the tax underpayment.

When the IRS can find substantial evidence to prove that the defendant intentionally submitted falsified documents to defraud the IRS and evade their taxes or earn a bigger offense. This automatically makes their crime a tax fraud. This can carry a civil penalty of up to 75 percent of the portion of the tax underpayment.

However, in some cases of tax fraud, the IRS may choose to launch a criminal case for filing a false report, especially if they have solid evidence to support their case. If convicted for filing a false tax report, the defendant could be facing a maximum of up to 3 years in jail and a fine of up to $100,000 for individuals and up to $500,000 for corporations as well as prosecution costs.

What Are Your Chances Of Being Charged For Filling Fraudulent Tax Reports?

Minimal. From a statistical standpoint, it is very unlikely you will be charged for filing false tax reports. This is because IRS launches criminal investigations on less than 2 percent of all American taxpayers, and only 20 percent of these investigations will result in criminal and/or civil penalties.

However, if you get into the IRS’s radar, things can get pretty ugly for you fast. Thus you need to ensure you take the necessary measures to handle these charges as quickly and smoothly as possible.

What To Do If You Are Facing Filing Fraudulent Tax Reports Allegations

If facing charges for filing fraudulent tax reports, you need to be proactive in resolving this situation as quickly as possible. Here are a few tips to help you handle this situation.

Contact A Tax Lawyer

The penalties for filing fraudulent tax reports are very severe. Thus, you want to do everything in your power to get out from under them, and a tax lawyer is the best way to do this. They have the experience you need to efficiently handle the complexities of tax law and dealing with the IRS.

They will guide you on every aspect of the IRS’s investigations, and assist you through your interactions with the IRS. Plus, they will help you understand the demands being made and what is your best cause of action.

Even if you are liable for filing a fraudulent tax report, a lawyer can help negotiate options that will avoid you avoid a trial. They can help you get a lesser charge that will keep you from spending any time behind bars.

All in all, we always advise that taxpayers are careful before they file their taxes to ensure the information is accurate and truthful. However, if you do find yourself facing these charges, our firm is ready to help you in any way we can. Whether you are looking for more information on tax law or are looking for a tax lawyer to represent you, our team can help you.

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Seppi Esfandi is an Expert Attorney who has over 21 years of practice defending a variety of cases.

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We cannot stress enough that you read, understand and follow these 10 basic rules if you are criminally charged or under investigation:

  1. Don’t ever talk to the police
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