When it comes to the duty of collecting taxes, the IRS does not take its role lightly – at all. Failing to comply with the tax laws can lead to a criminal investigation and, eventually, serious criminal charges. Whether the IRS pursues civil or criminal charges depends on numerous factors, including the specifics of the situation.
Find out the most common scenarios that answer the question, “When does the IRS pursue criminal charges?”
Not every tax violation will lead to criminal charges being filed. Depending on the precise violation committed and its severity, the legal penalties could be limited to a civil matter (in which you’ll pay penalties and interest) or a criminal matter, which could result in fines and jail time.
One of the biggest determinants of the type of charges brought depends on whether you had willful intent to defraud the government compared to making a mistake or merely being negligent.
While there is a long list of situations that can lead to someone learning firsthand the answer to: When does the IRS pursue criminal charges, these are 5 of the most common scenarios.
Tax evasion can encompass a lot of different activities. At its core, tax evasion is a willful attempt to avoid paying taxes that are due. This can be a result of concealing income, falsifying key financial information, overstating tax deductions, or using illegal methods to pay less money in taxes.
Tax evasion can also include failing to file taxes, especially for multiple years.
Each taxpayer has a legal obligation to report income and deductions accurately. This ensures that the government gets the full balance of what it’s actually owed.
The primary motivation to falsify a tax return is to reduce the balance of money that has to be paid in taxes. This fraudulent activity can manifest itself in several ways, including:
Life can get busy, and being late filing a tax return or missing a tax year altogether can reasonably happen, even if there is no willful intent to defraud the government. Though a failure to file typically doesn’t fall under the umbrella of financial crimes, IRS enforcement can lead to criminal charges when not filing was done purposely with intent to defraud the government.
Tax fraud is a serious offense that entails actively trying to deceive the government to get out of a tax obligation.
Examples of tax fraud can include that rise to the threshold of when does the IRS pursue criminal charges include:
Some illegal activity may be committed explicitly to get out of paying taxes, while other acts may have the ultimate effect of illegally reducing or eliminating a tax burden.
For example:
If the IRS discovers that one or more people have committed the above financial crimes, the government may pursue criminal charges.
There’s not a clear black-and-white answer to the question of when does the IRS pursue criminal charges, though some activities are more likely to lead to criminal charges than others. To learn more about what constitutes criminal activity or to get help if you are being investigated, contact Levy & Associates, Inc. at 313-447-1704 or contact us online.
Levy & Associates is available for free initial consultations. We’re happy to answer any questions you have about the audit process or address any concerns about your specific situation.
There’s never a good time to be audited, and the time-consuming process will take away from your business or family if you try to face it alone. Let us handle and coordinate communication, so you can return to your daily life.