Federal Tax Fraud Defense
Many people believe that tax fraud involves lying on one’s tax returns. Although federal tax law includes fraudulent statements on tax returns, it covers much more. The FBI and enforcement agents at the Internal Revenue Service investigate a wide array of potentially fraudulent conduct including illegal conduct intended to avoid paying taxes, failing to collect and report information to tax authorities, illegally obstructing the IRS’ ability to assess taxes, and taking affirmative steps that are part of a plan to commit tax fraud (such as destroying financial records or maintaining double sets of books).
Under Internal revenue Code Section 7201, every act of federal tax fraud is punishable by five years in prison and a large fine. Federal tax fraud investigations and prosecutions commonly involve the risk of extremely long prison sentences and six and seven-figure fines.
At the Law Offices of Jerod Gunsberg, we use our knowledge of federal courts in Los Angeles, Orange, Riverside and San Bernardino counties to aggressively defend any case involving tax fraud charges or a conspiracy to commit federal tax fraud.
What Is Federal Tax Fraud
Federal Tax fraud can takes place in many ways. The most common examples include:
- Filing a false original or amended return that omits income and/or claims deductions to which the taxpayer is not entitled.
- Taking an affirmative act that conceals money or assets on which taxes would be paid.
- Taking steps to help another person or corporation avoid payment or assessment of taxes that they would be obligated to pay.
- Making false statements to treasury agents.
- Concealing bank accounts and other assets.
- Using force or a threat of force to attempt to prevent an IRS agent from carrying out their duties (in violation of Section 7212 of the Internal Revenue Code).
In addition, to prove most cases of tax fraud, prosecutors must prove that had the taxpayer followed the law, he or she (or the corporation) would have owed taxes.
Defending Federal Tax Fraud Charges
To prove a case of federal tax fraud, prosecutors must prove every element beyond a reasonable doubt. Specifically, a successful defense of tax fraud involves common issues:
- Did the person accused of committing federal tax fraud take an affirmative act? Prosecutors must prove that the taxpayer took some action. Failing to act or a negligent mistake such as failing to meet a statutory requirement is generally not sufficient to violate Section 7201.
- Was the defendant’s conduct willful? The United States Supreme Court has defined willfulness to be a “voluntary, intentional violation of a known legal duty.” Prosecutors must therefore prove that the defendant acted with an intent to either avoid the assessment or payment of taxes. Willfulness is often proved by circumstantial evidence, such as knowingly providing false or incomplete information to a tax preparer.
- Did the taxpayer actually owe taxes?
- Did the taxpayer have a duty to report financial information to the IRS?
This is far from a comprehensive list. It does show, however, that tax fraud cases are often very fact specific. Moreover, they commonly involve reviewing a large quantity of documents and communications such emails. Many lawyers lack the resources and experience to present the best possible defense to the prosecutors’ charges.
Tax Fraud and Other Federal Crimes
People who are accused of tax fraud are often charged with a combination of the other federal crimes such as mail fraud, wire fraud, conspiracy, and money laundering. These crimes involve generally innocent behavior, such as mailing a letter or making a long-distance phone call. Much of the evidence in tax fraud cases involves email communications and written documents. It is therefore important that people not speak to federal agents before speaking with an experienced federal criminal defense attorney. Federal prisons are full of people who were told by the FBI and IRS agents that they were only witnesses in an investigation. And as with other federal crimes, federal agents and prosecutors are particularly interested in conspiracy cases that involve large numbers of people.
How a Federal Tax Fraud Defense Lawyer Can Help
Given how extreme the potential punishments are under federal law for bank fraud, it is critical that you work with an experienced federal tax fraud defense lawyer. Whether your situation involves the FBI or IRS agents, whether you may only be a “witness” in a tax fraud case, or whether you have been accused of being more actively involved in a federal tax fraud conspiracy, the Law Offices of Jerod Gunsberg will aggressively defend any federal tax fraud-related charge based on our extensive experience in the Federal courts in Los Angeles, Orange County, and Riverside.