Understanding Tax Fraud: A Brief Guide
Understanding Tax Fraud is difficult. If you face white-collar legal issues, an attorney or tax professional can help. Contact Hutton Tax Solutions for advice.
Indictments of popular figures or celebrities for tax fraud have become increasingly common in recent years. With the increasing prosecutions and convictions, it is important to understand tax fraud so that you do not fall into guilt by committing it unwittingly or otherwise.
Tax fraud, in basic terms, means not paying the tax you owe or entitling yourself to a refund you’re not entitled to through acts of fraudulent misrepresentation. It is the criminal act of filing an incorrect tax return or failing to file a tax return to lessen your tax burden or avoid paying taxes.
It occurs when a person or business intentionally sets out to defraud the IRS or state revenue department by underreporting income, overstating their business expenses, or failing to pay their tax debt and filing their income tax return.
Can You Accidentally Commit Tax Fraud?
Generally, the answer is no. You can’t accidentally commit tax fraud. You can’t accidentally file a false tax return or make a false statement. However, you might have omitted some relevant information from your tax return without criminal motivation.
If that is the case, you might need professional tax help from a reputable IRS tax resolution firm. They can plead your case and negotiate with the Internal Revenue Service (IRS) on your behalf.
Tax Fraud vs. Tax Evasion
Tax fraud and tax evasion are similar legal concepts in that they both involve intentionally avoiding paying taxes. Both criminal acts under federal and state tax law involve hiding money from the government. The perpetrators of both offenses can face harsh penalties, including payment of substantial fines or imprisonment.
In both cases, there is an element of criminal intent, and the failure of the individual or business to pay their outstanding tax is usually deliberate.
Despite the similarities, the facts or circumstances that make up each offense differ. Tax evasion is the intentional act of failing to pay taxes owed to the government. Failure to file tax returns at all is often an indication of tax evasion. To avoid alerting the IRS and potentially facing prosecution, file your tax returns when they are due.
Tax fraud, on the other hand, involves intentionally misrepresenting facts on a tax return to avoid paying due taxes. Failing to report all of your income, overstating deductions and expenses, claiming false dependents, and providing false information on your tax returns are indications of tax fraud.
Therefore, filling out your tax returns with the utmost attention to detail is essential. An innocent mistake on your part could be seen as a fraudulent act by the IRS, which could open you up to investigation by the IRS and possible prosecution and conviction.
If you’re in Oklahoma and you’re already facing IRS investigations and possible penalties, consider contacting a top-notch IRS tax attorney who can help you while you negotiate your tax liability.
What Are the Penalties for Tax Fraud?
If you’re found guilty of committing tax fraud, you could face several penalties under Oklahoma law, including:
Forfeiture of Property
You may have to forfeit your property or tangible assets to satisfy the outstanding tax debt. This penalty is likely when the offender obtained the asset(s) in question during the commission of a tax crime. It could also apply if you acquired the assets with hidden funds such as cash stashed in foreign bank accounts or money from an offshore bank account.
The penalty for filing fraudulent tax returns includes being liable to pay a fine of not less than $1000 and not more than $50 000. The exact amount to be paid as fines is not fixed. A tax penalty is determined by several factors, such as the amount owed, the length of time it went unpaid, and whether you were charged with an offense, such as failure to file or pay tax bills.
Jail time is another potential consequence if you’re guilty of tax fraud. Tax fraud is a felony, so if convicted, you could face some time in prison — typically up to five years per count or ten years total if there are multiple counts. The jail time could be with or without additional fines.
The judge may place you on probation if you’re convicted of tax fraud instead of sending you to jail or prison. Probation could also be imposed after a completed prison sentence.
Probation generally requires you to meet certain conditions, such as regularly reporting back to court and paying all the necessary fees. If you fail to fulfill the conditions of your probation order, you might be facing additional jail time.
How a Tax Resolution Lawyer Can Help You
When dealing with large tax debts due to failure to pay the federal income tax, it is crucial that you understand the options available to you. It is also essential to have the correct information that could support your case. That’s where an experienced tax attorney comes in.
A tax lawyer has extensive knowledge of the relevant tax laws and significant practical experience in resolving tax liability issues. They can help you if you have been charged with tax fraud or intentional wrongdoing.
They can also help you navigate through some of the most complicated aspects of the tax code, such as deductions and credits. The role of a tax fraud lawyer is also to ensure that you understand how your taxes are calculated and correctly filed with the IRS. They help their clients find ways to minimize their taxes.
An Oklahoma tax attorney can help you resolve your IRS tax debt. So, if you’re in such a bind, don’t hesitate to get in touch with us at Hutton Tax Solutions. We are an IRS tax resolution firm with several years of experience representing clients facing IRS tax liability issues. Our objective is to assist individuals, families, and businesses resolve their tax issues with the IRS at an affordable and efficient cost.
Our offices are in Edmond and open from Monday to Friday. Contact us today to book a free consultation and begin the steps towards resolving your tax liability.