Tax Crimes And Evasion
The IRS has authority to perform high-level, complex investigations when it comes to tax crimes. Under the United States Department of the Treasury, there are over 2,000 special agents in the IRS’ Criminal Investigation unit whose purpose is to determine crime, enhance voluntary compliance of the tax codes and promote public confidence in the tax system.
What Is A Tax Crime?
Although filing taxes is on a voluntary compliance basis, people earning income must file taxes. If a person required to file taxes knowingly and intentionally refuses to file an income tax return or reports incorrect information on the tax return, this is fraudulent and may be a crime.
The IRS investigates four different types of tax crimes related to:
- Legal sources of income
- Illegal sources of income
- Narcotics-related financial crimes
- Counter-terrorism financing
The IRS may accuse a person of tax evasion for issues such as:
- Understating their income
- Overstating their expenses
- Making false claims for credits or exemptions
- Not reporting taxable income
What If I Report Personal Expenses As Business Expenses?
The IRS regards reporting personal expenses as business expenses as unlawful. Civil and criminal penalties may apply when a person is found to have reported false information on their tax return.
The IRS criminal investigators use technical surveillance, informants, undercover investigations, IRS records, general public records, business records, bank records and even your trash to locate evidence.
Criminal charges may be brought for up to six years of the date the tax return should have been filed, fines up to $25,000 per tax year involved and may come with prison time up to one year for each year the IRS finds a tax return should have been filed.
Contact Demetrius J. Karos, Ltd., at 800-465-6208 to speak with one of our attorneys in Naperville or Frankfort immediately if the IRS communicates with you. We are experienced in negotiating IRS offers in compromise when available as well as installment agreements and payment plans to resolve tax debts.