If you've been accused of tax fraud, it's natural to feel overwhelmed and unsure of what steps to take next. This is a serious allegation, so it is important that you consult with an experienced criminal defense attorney, like ours at Foley Griffin, who can advise you on your rights and help you pursue the best possible resolution to your situation.
In this blog post, we will explore some key considerations when dealing with tax fraud allegations and shed light on how an experienced lawyer can advocate for your legal interests.
What Is Tax Fraud?
Tax fraud is a crime that involves willfully and knowingly submitting false or fraudulent information to the Internal Revenue Service (IRS). This can include underreporting income, overstating deductions, or claiming false credits or refunds. Tax fraud can also involve failing to file a tax return altogether.
The penalties for tax fraud can be severe. If you are convicted of tax fraud, you could face:
- Fines of up to $250,000
- Imprisonment for up to five years
- Both a fine and imprisonment
In addition to these criminal penalties, you may also be required to pay back taxes, interest, and penalties. You may also be barred from holding certain professional licenses or government jobs.
NY State Tax Laws
Criminal tax fraud can also be prosecuted at the state level by the NYS Department of Taxation. New York categorizes criminal tax fraud charges by degree, with fifth-degree tax fraud being treated as a class A misdemeanor and first-degree criminal tax fraud a class B felony. The severity of the case will determine the degree you are charged with, and penalties upon conviction can include fines, imprisonment, or both.
State tax fraud charges should be taken just as seriously as federal tax fraud charges. You should consult an attorney as soon as possible if you have been arrested or think you are under investigation for tax fraud.
Some other things to keep in mind about the ramifications of a tax fraud conviction in New York State:
- If you are convicted of tax fraud, you may also have to pay interest on the taxes that you owe.
- You may also be required to file amended tax returns for previous years.
- Tax fraud can have a negative impact on your credit score.
- If you are convicted of tax fraud, you may have difficulty finding a job or getting a loan.
Examples of Tax Fraud
One common form of tax fraud is underreporting income. This occurs when an individual intentionally fails to report their income to the IRS. This can be done by failing to report income from self-employment, cash transactions, or other sources. Underreporting income can also lead to significant tax liabilities, and the IRS often imposes interest and penalties on the unpaid tax balance.
Another form of tax fraud is overstating deductions. This occurs when an individual claims deductions not allowed by law, such as claiming a home office deduction when no home office exists. Overstating deductions can reduce an individual's tax liability, but it is illegal and can result in penalties and fines.
Claiming false credits or refunds is another common form of tax fraud. This occurs when an individual claims credits or refunds to which they are not entitled. This can include claiming a refund for taxes that were never paid or claiming a tax credit for dependent children that do not exist. These actions are considered fraudulent and can lead to significant legal consequences.
Finally, failing to file a tax return altogether is a form of tax fraud. This occurs when an individual fails to file a tax return despite earning income. This serious offense can result in criminal charges, fines, and even imprisonment.
What to Do If You Are Accused of Tax Fraud
If you are facing allegations of tax fraud, you first need to hire an experienced criminal defense attorney. Tax fraud charges are serious and can lead to both criminal and civil consequences, including hefty fines and prison time. Your attorney can investigate the allegations against you, review financial records, and analyze the evidence to help you build a strong defense strategy.
The IRS has several tools at its disposal to investigate and prosecute tax fraud cases. These tools include:
- Audits: The IRS may audit your tax returns to look for potential problems.
- Criminal investigations: The IRS may open a criminal investigation if it suspects that you have committed tax fraud.
- Civil lawsuits: The IRS may file a civil lawsuit against you to collect back taxes, interest, and penalties.
Here at Foley Griffin, we are prepared to work with you to develop a plan that protects your rights and interests throughout the entire legal process. When you hire our team, we work hard to prepare a defense that's tailored to your unique circumstances and which helps you get your best chance of success. If you're facing tax fraud charges, our skilled criminal defense attorney is here to provide much-needed support and guidance during this stressful time.
Contact Foley Griffin online to schedule a confidential consultation with our criminal defense lawyer.