The Internal Revenue Code allows each taxpayer certain legal ways to minimize their tax liabilities. You can take advantage of charitable donations for tax deductions. However, it is a federal crime if you knowingly and willfully try to defeat or evade taxes and could then be liable for IRS tax fraud penalties.
To help you better understand tax fraud laws and IRS tax fraud penalties you should seek the advice of an experienced and qualifies tax attorney. Prior to your consultation, the following are steps to take regarding investigation, prosecution process and detection.
First Step: You may be subjected to an IRS audit to go over the details of an entity. This may have occurred because someone blew the whistle on you or from some other tip the IRS may have been privy to. If there is a suspicion of fraud during the audit process, the agent may impose IRS tax fraud penalties.
Second Step: There is an enforcement wing that operates under the IRS called the Criminal Investigation Division (CID) that takes over the case if the agent feels it has high profile entities or involves complications.
Side Note: If the case is about ordinary taxpayers it will go to the General Enforcement Division. If the case involves drug rackets, organized crime or unions, it will then be handled by the Special Enforcement Division.
Third Step: The CID has highly trained, qualified professionals experienced in accounting to look into the matter at hand. If they can gather proper evidence to prove money laundering, evasion or fraud, they will proceed with the case and the taxpayer could be subject to IRS tax fraud penalties.
Side Note: The CID will use many different resources in order to build their case and will only proceed if the case is of a serious matter.
Fourth Step: When the CID completes the investigation, the findings are sent and determines if they will move forward to prosecute the taxpayer or pass. It is then analyzed by the IRS legal experts to determine its merit.
Fifth Step: If it warrants prosecution, the IRS sends the report to the US Department of Justice tax Division. It will then be analyzed again by federal tax crime experts and they will make the determination to proceed or not.
Sixth Step: If the outcome from the Justice tax Division is to move forward with prosecution, it then is in the hands of the US Attorney’s office, the closest location to the suspected taxpayer. They will now start to prepare the prosecution and indictments.
Seventh Step: The federal tax criminal case now is presented before the Grand Jury. If the taxpayer in question is convicted, they face serious IRS tax fraud penalties that can amount to thousands as stated in the tax fraud law and can even face a prison term.
It is vitally important to seek the guidance of a tax attorney when faced with any such IRS tax fraud penalties.