When Does the IRS Pursue Criminal Charges?  

The IRS is most likely to pursue criminal charges when it suspects that a taxpayer has failed to report income or has intentionally filed a false or fraudulent tax return. To detect fraud, the IRS utilizes any direct and circumstantial evidence that may be available, including records of payments from service providers, deposits into bank accounts, and information about purchases that do not match reported income levels. 

The criminal tax defense attorneys at Ayar Law in Farmington Hills, Michigan help taxpayers to reduce or prevent the risk of tax fraud charges that can lead to substantial fines or incarceration.  

If you have any concerns over inaccuracies in your tax returns, you will always be in a better position when you retain an experienced tax fraud lawyer and address those inaccuracies before the IRS initiates an investigation that can lead to criminal charges. 

How does the IRS distinguish negligence from intentional tax fraud? 

The IRS scrutinizes tax returns and a taxpayer’s filing history for evidence of deception, misrepresentation, false or altered documentation, and failure to file required forms.  

The IRS generally understands that filing tax returns is a complicated process, and it is somewhat tolerant of errors that flow from misunderstanding instructions and transcription errors on returns. The IRS may conclude, however, that a taxpayer has crossed the line from negligence to fraud when it determines that the taxpayer has: 

  • Understated or excluded substantial amounts of income 
  • Has taken phantom deductions or credits against income 
  • Concealed assets or income in improper tax shelters 
  • Operated primarily on a cash basis in a manner that enables underreporting of cash income  
  • Failed to maintain proper or adequate accounting records

Most sophisticated taxpayers are well aware of their income levels and will understand if a tax return that they file is incorrect or inaccurate. In that event and if the IRS has not yet opened a criminal investigation, the taxpayer has an opportunity to enlist the assistance of a criminal tax defense lawyer to fix those problems before they catalyze a criminal indictment. 

What penalties will a taxpayer face when the IRS pursues criminal charges?  

Depending on the extent and severity of what it deems to be a taxpayer’s fraudulent conduct, the IRS may pursue: 

  • Felony charges with a multi-year prison sentence. 
  • Liens and levies on the taxpayer’s property in the amount of all underpaid taxes, interest on past-due amounts, and substantial fines that may include a 75% fraud penalty.

A convicted taxpayer will also have a felony conviction on his or her public record, and that conviction can lead to reduced employment and business opportunities.  

Contact Ayar Law Before the IRS Contacts You 

You will always be in a better position to deflect IRS criminal allegations when you take a proactive approach to any tax problems that may be reflected on your returns.  

You can take an aggressive proactive approach when you retain the attorneys at Ayar Law in Farmington Hills, Michigan to. 

Do you need a savvy, accomplished lawyer to represent you in negotiations with the IRS? Please call our offices to speak in confidence with a tax fraud attorney about potential criminal charges that you may be facing, and about how you can address your tax problems before those charges threaten your livelihood.