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Income Tax: Criminal vs. Civil Violations

Income Tax: Criminal vs. Civil Violations

Each year, millions of U.S. citizens are required to file federal income tax. At the end of tax season, some individuals will be accused of not paying their fair taxes. The IRS may conduct a civil audit which concerns the determination of the accuracy of your tax return and can result in additional taxes, interest, and monetary penalties.  The IRS can also investigate you for criminal violation of tax laws which can result in felony convictions and federal prison.

If the IRS investigates or accuses you of tax fraud, you should seek out the help of a federal criminal defense attorney immediately.

The Difference Between Civil and Criminal Tax Violations

Income tax fraud is described as the willful violation of a known legal duty. A negligent mistake on the computation of taxes is not a crime. Unfortunately, the IRS may consider a person’s actions to be intentional rather than negligent. Federal tax crimes include:

  • Tax evasion
  • Failure to report all income
  • Failure to timely file a tax return or other required document such as the disclosure of offshore accounts
  • Willful evasion of payment of tax
  • False statements on tax returns (often involves understatement of income or false deductions)
  • Providing false documents to the IRS during an audit
  • Failure to collect and pay the government the employee withholding taxes
     

If you are audited by the IRS, your tax return will be thoroughly examined for errors and red flags. While the IRS understands that the tax code is complex, the IRS will try to determine whether or not the error was an honest mistake or an intentional attempt to cheat the IRS. The IRS can make a mistake and criminally charge tax fraud when conduct was only negligent or a mistake.

The IRS will investigate the following when determining if an incorrect entry on the tax return was because of fraud or a simple mistake:

  • Using too many deductions that were false
  • Using false documents to justify deductions
  • Not reporting true income
  • Having several financial ledgers or 2 sets of books
  • Making false claims regarding business expenses
  • Claiming dependents that are not yours
  • Classifying workers as independent contractors and not withholding taxes
  • Withholding taxes but not paying the withholdings to the IRS
  • Not reporting offshore bank accounts and certain assets

Unfortunately, even innocent people can be falsely accused of income tax fraud. In cases like this, an experienced federal criminal tax defense attorney will look at the nuances of your case to determine how best to defend your rights.


If your tax return is flagged, there will be further investigation, either civil and/or criminal. The IRS civil auditor may start with one tax year and then expand the audit to additional years and ask you to produce documents.

Tax fraud is a federal crime that can result in long terms in prison under several different tax laws. If you are accused of income tax fraud or think that the IRS suspects you of tax fraud, speak with the professionals at the Law Offices of Horwitz & Citro, PA.  You need a federal criminal defense attorney experienced in defending criminal tax cases to properly answer your questions and address your concerns.
 

Call the Law Offices of Horwitz & Citro, P.A. for a free consultation today.

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