Fraudulent tax returns hurt everyone. To combat this crime, the IRS is forced to devote costly agency resources. State and federal government budgets are deprived. And for the average taxpayer, an additional consequence this year will be delayed tax refunds.
Specifically, the IRS recently announced that it would delay payment of tax refunds to individuals claiming the child tax credit or earned income tax credit until February 15. The IRS will utilize the additional time to screen tax returns for fraud. The IRS hopes to avoid a repeat of last year, when it paid out $3.1 billion in fraudulent tax refunds.
The additional IRS scrutiny may very well result in more criminal tax lawsuits. As we discussed in our last post, overstating or falsely claiming deductions is one example of criminal tax activity.
Yet even unintentional mistakes might have consequences. There are various civil tax penalties, including penalties for negligence, disregard, civil fraud and accuracy-related issues. These penalties are intended to encourage taxpayers to file correct tax returns and to pay their taxes.
Our law firm is committed to helping our clients avoid both civil and criminal tax penalties. If your tax return is under audit, don’t delay in consulting with a tax attorney. We fight for our clients in and out of the courtroom. That advocacy may take the form of dispute mediation; negotiating affordable tax repayment plans with the IRS, or preparing for trial, when necessary. We have the experience to explain your options and provide assistance with your tax problems, regardless of the context.
Source: Fox News, “IRS to delay tax refunds for millions of low-income families,” Jan. 10, 2017