Tax fraud occurs when a taxpayer willfully falsifies information on a tax
return to limit their tax liability. This can occur in many forms. Underreporting
or omitting income, overestimating expenses or deductions, failing to
collect employment taxes, violating employer holding requirements, or
making false statements to government officials can all trigger a criminal
investigation by the Internal Revenue Service (IRS). The consequences
of a criminal investigation are severe. A finding of tax fraud can result
in up to five years’ imprisonment, a fine up to $250,000 ($500,000
for a corporation), plus all of the government’s prosecution costs.
The IRS can also use a criminal tax conviction to prove civil fraud and
assess civil penalties of up to 75% of the amount due.
Every criminal investigation is led by a “Special Agent” that
has one simple objective – to mount a case against you for prosecution.
Criminal investigations are often difficult to detect and highly invasive.
It is not unusual for a Special Agent to show up to your home or work
unannounced. This is an intentional tactic to take you by surprise to
increase the likelihood you may unknowingly harm yourself. Questions regarding
the intent behind certain transactions or financial decisions are strategically
aimed at eliciting incriminating information. Special Investigators will
also interview your family, friends, coworkers, or employees in order
to acquire evidence that shows tax fraud may have occurred. This wide-ranging
style of harassment can last for years and be extremely intimidating.
There are, however, warning signs that a criminal investigation has commenced.
Any contact whatsoever from a Special Agent likely indicates a criminal
investigation is underway. This may be in the form of a letter, phone
call, or service of a subpoena to appear in front of a grand jury. The
Special Agent may even issue a summons upon your bank, financial advisor,
or accountant requiring them to provide certain documentation such as
your tax records. Unfortunately, statements made to your accountant are
not protected by any type of confidentially in a criminal case. Not all
warning signs are as obvious and may be difficult to detect. If you are
already under civil audit and the audit is abruptly suspended before completion,
your case may have been referred to a Special Agent for criminal investigation.
Similarly, if IRS personnel conducting your civil audit become unexplainably
unreachable, it could mean they are putting your case on pause in order
to not jeopardize a possible criminal prosecution. These subtle tactics
can lead to lengthy sentences of imprisonment or substantial fines without
the help of an experienced criminal defense attorney.
Those facing criminal investigations often obtain legal representation
early in the process. The IRS is tremendously resourceful but their ability
to bring a successful prosecution is reliant upon building a case against
you. Berry Law Firm recognizes this critical vulnerability and has the
experience to protect your personal and financial wellbeing. The attorneys
at Berry Law Firm understand that tax fraud cases are inherently complex.
However, our team of attorneys is uniquely experienced to defend you against
the intrusive nature of criminal investigations.