The world of taxes is intimidating and complex, and unfortunately, it’s one area of life where a simple mistake can cost you a significant amount of money. Whether you’ve been accused of fraud by the Georgia Department of Revenue or the IRS, the time to act is now. These agencies don’t act unless they have a substantial amount of evidence and information, which means they are already ahead of you.
With the help of a tax fraud attorney in Georgia, you can fight tax fraud charges and work toward a favorable outcome. Here’s an overview of what to expect when you hire a tax fraud attorney. To get help now, contact us today to schedule a consultation.
Types of Tax Fraud
The term “tax fraud” refers to a wide range of activities that involve intentionally underpaying taxes by using false or fraudulent information. The term “intentionally” is important here because it’s a key factor in any tax fraud case — a perpetrator must carry out this act willfully. It cannot simply be a mistake or miscalculation.
Some of the most common types of tax fraud include:
- Underreporting income: Underreporting your income lowers your tax liability. Individuals may underreport income by working under the table and not reporting it to the IRS or intentionally claiming that they receive less than they truly make.
- Claiming deductions or credits you don’t qualify for: Using deductions or credits that you don’t qualify to receive fraudulently decreases your tax liability or increases your refund. People may falsify charitable contributions, inflate business expenses, or otherwise manipulate their deductions.
- Hiding assets: Hiding assets offshore to fly under the radar of the IRS is a common trick used by those attempting to drive down their tax liability. This type of tax fraud is highly elaborate and complex, making it difficult to track down.
- Employment tax fraud: Employers who withhold employment tax but fail to pay those taxes to the government can find themselves in significant legal trouble.
- Sales tax fraud: When a business intentionally underpays sales and use taxes, it may be engaging in tax fraud.
What Happens if You’re Found Guilty of Tax Fraud?
The consequences are severe if an individual is convicted of tax fraud at a state or federal level. Depending on the situation, an individual may face civil or criminal penalties. On the civil side, someone who intentionally underpays their state taxes in Georgia will be hit with a 50% penalty in addition to the taxes owed. The IRS can assert penalties as high as 75% on the civil side.
When a case rises to the level of criminal penalties, the stakes are far higher. Before someone is charged with tax fraud, the IRS has looked at the evidence and determined that their underpayments or inaccurate deductions were not just mistakes but intentional and willful fraud. In the absence of evidence pointing to fraud, the IRS will generally assume that a mistake has occurred. While this doesn’t save you from interest and late fees, it does prevent criminal charges.
But when the taxing agencies believe fraud has occurred, the perpetrator is looking at massive fines and a years-long prison sentence. Someone who intentionally evades taxes can spend up to five years in prison and pay up to $250,000 in fines. Corporations found to have evaded their taxes may pay up to $500,000. This is in addition to the taxes already owed.
Those convicted of making false or fraudulent statements may spend up to three years in prison and pay fines as high as $250,000 for individuals and $500,000 for corporations. Willfully failing to file a tax return or maintain proper records can result in one year of incarceration and fines as high as $100,000 for individuals or $200,000 for corporations.
Other consequences may follow a tax fraud conviction. Accountants and others licensed to do tax returns are likely to lose their professional licenses when they are involved in tax fraud. Tax fraud allegations — even if they turn out to be unfounded — can also devastate an individual’s or corporation’s reputation within their community. Additionally, getting caught engaging in tax fraud once may put you under higher scrutiny for years or decades to come.
In addition to civil and criminal fines, if the state taxing agencies assert fraud, it gives them unlimited time to audit your tax returns.
Potential Defenses Against Tax Fraud
When you choose Wiggam Law, we’ll explore a variety of possible defenses that may be applicable in your case. Available options to look into may include:
- Lack of intent: Remember that tax evasion and related charges rely on a taxpayer’s willful and intentional underpayment or underreporting. If a taxpayer’s underpaid taxes result from ignorance, a misunderstanding of tax law, or simply poor handling of tax forms, that is not enough to indicate that fraud has occurred.
- Inaccurate professional advice: It’s important to note that taxpayers are responsible for whatever is included on their tax documents. They sign the paperwork indicating that the information is true and complete. However, when they rely on a tax preparer or an accountant for sound professional guidance, their use of inaccurate professional advice may be a defense. When you turn to a professional for your taxes, you should be able to trust their handling of your forms and documentation.
- Insufficient evidence: If the agency is building its case on inaccurate or weak evidence, calling that out can lead to a favorable outcome for the accused party.
- Procedural errors: You have rights when you’re accused of a crime. If an investigating agency violates those rights, we can advocate for you.
When to Talk to a Tax Fraud Lawyer
The moment you find out you are under investigation by the IRS or the Georgia Department of Revenue, you need to talk to a Georgia tax fraud lawyer. These agencies are very discreet about their investigations, and by the time you become aware of an investigation against you, they have already put in a lot of legwork.
If you receive a letter from the “Office of Special Investigations” with the Georgia Department of Revenue or your IRS Agent has the title “SEP Agent,” these are some signs that the IRS or Georgia Department of Revenue may be investigating you for fraud.
You need a tax fraud attorney who can look into the charges against you, analyze the evidence being used to build a case against you, and begin constructing a defense.
You’ll also want to contact an attorney if you’ve received a notice or summons from the IRS or the Georgia Department of Revenue. This is not the time to reach out to them directly to attempt to clear up a misunderstanding; it is not a misunderstanding, and they are not looking for a way to clear your name. Anything you say to them could end up being used against you, and it is far safer to communicate with the agency in question through your attorney.
Perhaps you haven’t heard of an investigation against you, but you worry that your compliance with tax laws has been less than perfect. Speaking with a tax fraud attorney should be your next step. Your attorney can look into your concerns, advise you on the potential legal dangers you face, and provide options for becoming compliant and avoiding civil or criminal penalties.
Finally, if you’ve been arrested on tax fraud charges, it is clearly time to connect with a tax fraud attorney. The sooner they can begin working on your case, the better off you are.
Wiggam Law Can Help You Fight Tax Fraud Charges
You have much to lose when you’re being investigated for tax fraud. You are at risk of having to pay hundreds of thousands of dollars in fines, back taxes, the costs of prosecuting your case, and more — and that’s before you consider the possibility of imprisonment.
Now, more than ever, you need an attorney whose entire practice is devoted to tax law. Our team at Wiggam Law exclusively works in tax law, giving us the knowledge and experience necessary to handle cases as complex and high-stakes as yours. Because we only work in the area of tax law, we are able to stay up-to-date on tax code updates and revisions that could affect you.
Additionally, our dedication to tax law means we’ve had the chance to handle many individual and business tax fraud cases over the years, including both federal tax fraud and Georgia tax fraud. We know the government doesn’t take chances in tax fraud cases, and we must work quickly and accurately to fight for a favorable outcome for you. While the government does take tax fraud seriously, it also doesn’t want to pour endless money and time into litigating these cases. By utilizing our strong negotiating skills, we’ll work toward a solution that helps you achieve the best possible resolution for your case.
Our firm can also assist with proactive compliance measures to help you avoid any potential tax fraud concerns in the future. Whether you’ve been charged with tax fraud or not, taking steps to ensure compliance can give you peace of mind and help you avoid expensive fines and penalties in the future.
Choose Wiggam Law for Your Tax Fraud Case
Whether you need help with an ongoing investigation or simply want to ensure that you are compliant with all state and federal tax requirements, the team at Wiggam Law is here to help you. Contact us online or call us at (404) 233-9800 to schedule a consultation today to see how we can help you.