Any cheating on your tax returns is classified as a crime. That said, tax auditors will usually not bother with minor infractions and silently adjust your records to discount them or give you a small fine.
Things become really serious when the Criminal Investigation Division gets involved. If you get contacted by the CID or someone else has been questioned about you, you need to drop everything and find a good tax attorney immediately.
Daily & Toups is a specialized tax law firm. We can organize your defense, taking action against the most critical problems before the IRS has a chance to press criminal charges.
Contact us and talk freely about your taxes – you’re always protected by attorney-client privilege, meaning the information you share is strictly confidential, regardless if you decide to use our services.
The IRS will gladly use scare-mongering to submit regular taxpayers into compliance. And while a majority of tax infractions are described as crime, criminal investigations are reserved only for the worst offenders.
Tax fraud is a broad term, describing any willful forgery of official records and documents in an effort to defraud the IRS and avoid paying your taxes.
Small infractions often get the benefit of the doubt, meaning the tax auditor will adjust the examination report to discount them and perhaps add a small fine – around 20% over owed taxes.
Obvious fraud cases get slapped with a civil penalty up to 75% over the tax originally owed with interest being added to the whole sum.
Usually, tax auditors are trained to look for and spot these issues and refer you up to the CID. In reality, only the most unscrupulous cases, where tens of thousands of dollars are involved, reach the Criminal Investigation Division. If a tax auditor suspects an outrageous criminal operation, they will refer you up to the CID.
The Criminal Investigation Division is a unit of 4,500 IRS employees. Consider them as the police department of the IRS. CID special agents are highly trained by the IRS and FBI. They are real-world detectives with badges and guns.
If a tax auditor or an informant refers your case to the CID with a fine sample of dirt attached, you can bet a pair of special agents will find their way to your doorstep.
Special agents are skilled interrogators. A few innocent background questions will quickly grow into a whole barrage forcing you to either tell them everything or lie blatantly. Neither will help your case and, in fact, every word you say will be digging your grave a little deeper.
So, if it comes to this point, the best thing to do is avoid the encounter. You should not try to defend yourself or reason with the agents. Just tell them you will get back to them and call your lawyer immediately. The special agents will go about their business either way. They have access to unprecedented resources and will dig up more details than you can imagine.
Upon conclusion of their investigation, CID will likely refer you back to a tax auditor, who will impose a 75% tax penalty.
If the special agents have uncovered enough evidence, they can contact the Department of Justice and recommend prosecution. If the case goes through, defendants face up to $25,000 and 1 year of jail time for every year they failed to submit a tax return.
Other possible penalties and prison sentences include:
The reality is the IRS rarely sends people to prison. Less than 2% of fraud cases are prosecuted in court. The prison system is already overcrowded and the IRS is much more interested in recovering lost revenue.
Whichever way it goes, the consequences will be devastating. To prevent that from happening, you need to keep your mouth closed and contact the best tax crime attorney you can find.
At Daily & Toups, we’ve dealt with hundreds of tax cases involving fraud and crime.
We have practiced tax law for 50 years. We’ve worked closely with the IRS, developing programs for their agents, as well as Enrolled Agents and CPAs. Our attorneys have excellent knowledge of internal IRS practices and procedures.
Our mission is to secure the best outcome for our clients. Where we can’t stop the IRS from imposing a penalty, we work to reduce the charges as much as possible.
We’ll use all available resources and leverage to mitigate the worst-case scenario – a prison sentence. Then, we will work our way up, negotiating with the IRS for a fair resolution, giving you the ability to pay off your debts and maintain your integrity.
Mr. Daily is THE expert in his field. I've had the pleasure to work with him for over 20 years and he has always found the time to counsel and explain the best course of action.
Mr. Daily and his expertise helped me get out of a tax situation that could have forced the dissolution of my business and ruined my credit.
Fred assisted us through a multi year audit with ease and professionalism. His guidance was excellent and it was obvious he knew exactly how to handle the IRS
Thank you. Thank you. You got the tax lien removed and I was able to get my home re-financed.
Two years ago my finances (and life) were a mess. The IRS was on my back with tax levies of my bank accounts. Today, all of that is behind me. I can sleep at night.
The accountant that you warned me against tried to create endless fear as an incentive to hire him. You then helped me through the process of getting back into the tax system and not worry.
Fred, I believe you function as part attorney, part therapist. You really do care about your clients.
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