Both the Internal Revenue Service and New York State take the evasion of paying taxesseriously and will conduct a criminal investigation if they believe that you are doing so. If either or both agencies are able to prove that you purposely did not pay taxes, you will face monetary penalties, as well as the possibility of prison.
You may be found guilty of committing tax fraud if you intentionally avoid paying tax by:
- Under-reporting taxable income
- Claiming excessive deductions, exemptions, or tax credits
- Knowingly falsifying tax returns
- Not filing your tax return when tax is owned
- Willful Failure to Pay
- Willful Failure to Keep Records
- Concealment of assets
- Failure to cooperate with tax authorities
- Engaging in or attempting to conceal illegal activities
Once a criminal tax investigation for tax fraud or tax evasion commences, you need the experience of a tax attorney to obtain the best results. A criminal tax fraud or tax evasion charge can result in large monetary penalties or imprisonment.
A criminal tax investigation can be initiated at any time. Often it will originate from a civil tax auditor working for the IRS or New York State who believes that there is illegal conduct. If the investigation is by the IRS, their Criminal Investigation Division (CID) will be building the case against you. If the tax fraud initiates in your state, the investigation will be done by either the State Attorney General or the county District Attorney for the county that you reside in. In either case, these agencies employ agents and investigators who are skilled in finding tax fraud and tax evasion. Once the investigation is complete, the agent will often recommend prosecution.
If you are facing a federal tax fraud or tax evasion charge, the agent in your case will often recommend prosecution. The IRS will review the case before deciding to bring the case to the Department of Justice, Tax Division, in Washington D.C. At this level, prosecutors who specialize in criminal tax crimes will review the case and make the final decision if it will be prosecuted. If the Department of Justice, Tax Division approves prosecution, the case goes back to a local U.S. Attorney’s office with the direction that the individual should be prosecuted for the crime.
If you are facing a state tax fraud or tax evasion charge, the State Attorney General or the County District Attorney will decide if the case should be prosecuted.
The process leading up to prosecution is complex and multifaceted, but this can be an advantage to the taxpayer. Since there are multiple tiers that your case has to go through, with the help of an experienced New York Tax Attorney, you could prove your innocence at a lower level and never face prosecution.
If you are facing criminal tax evasion or tax fraud charges you may need to engage a tax attorney. Actions that you make which you believe are correct could significantly hurt your case. You need an experienced tax attorney who knows the system and can anticipate any problems to work towards a successful resolution.