The IRS does not take tax fraud lightly. In a recent example, a federal court judge sentenced a tax professional to two years in prison for that felony offense.
Notably, the professional's stiff sentence implicated only a single felony count of aiding and assisting in fraudulent and false tax return preparations and filings. However, the alleged number of fraudulent returns totaled 26 and involved eight different taxpayers over a four-year tax period.
The judge also ordered the man to repay a sizable portion of the tax money back to the U.S. Treasury. Specifically, the judge ordered $92,339 as restitution. The IRS alleged that $114,791 in excessive refunds was given out due to the false information in the returns.
The distinction between a tax crime and a civil tax audit should be apparent from this example. An unintentional mistake on a return may subject a taxpayer to interest from the unpaid tax, and in some cases a penalty. Computer screening, document matching or related examinations are some of the ways that the IRS selects returns for audit. Yet only a small percentage of tax returns are audited each year.
In contrast, the IRS devotes sizable resources to its investigation and prosecution of criminal tax matters, such as tax evasion or fraud. According to an authority in charge of the IRS investigation in the above example, the IRS aggressively pursues intentional tax violations in order to protect the nation’s confidence in the federal tax system.
An attorney that focuses on tax matters can help clients facing civil or criminal liability from state and/or federal tax authorities. Both types of tax issues can be serious, hurting a taxpayer’s checkbook and even his or her individual liberty.
Source: The News Star, “Tallulah tax preparer gets two years for false returns,” Sept. 13, 2016