White collar crimes typically encompass several types of fraud and include deceit for some kind of financial gain by the defendant. There are several ways in which you can commit fraud through your taxes, with one of the most popular being tax evasion – which occurs when you attempt to avoid your taxes in part or whole. It can also occur when you intentionally fail to pay taxes that are due, fail to report all income, make false claims, or prepare a completely false return altogether.
Because taxes can be complicated and mistakes can be made, it can sometimes be difficult to place whether or not somebody was acting negligently or not. Most people find that tax rules are difficult to decipher and may run into a few mishaps here or there – which is not considered to be fraud. If they believe that you are willfully evading the tax code, they will attribute this to negligence and can issue a penalty. The IRS Criminal Investigation (CI) will issue agents at times when they believe that tax crimes and money laundering has taken place. Sometimes they find sophisticated ways to break through passwords and other barriers to obtain what they are looking for.
Suffering the Consequences: Penalties
If you willfully avoided your taxes in a criminal manner, you could suffer penalties on both a criminal and civil level. Depending on the type of fraud, this will determine the appropriate penalty. If you have evaded taxes altogether, for instance, you could be guilty of a felony and this includes imprisonment of up to 5 years, $250,000 in fines for individuals, and the cost of prosecution. No matter what, if the IRS finds out that you are willfully avoiding taxes and committing a serious crime that puts loads of money in the crossfire, you could be serving time in prison for your crime.
Negligence and fraud can lead to much bigger issues for the IRS and yourself. This is why, if you have avoided your taxes or committed a crime of fraud, it is important to speak to an attorney about how to move forward. We have experience in defending clients and can help you with your case.