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Tax Law > Tax Fraud & Tax Evasion


TAX FRAUD

Tax Fraud is defined as an intentional wrongdoing, on the part of a taxpayer, with the specific purpose of evading a tax known or believed to be owing to the Internal Revenue Service. Therefore, tax fraud requires both, a tax due and owing, and fraudulent intent to avoid payment. At the Miami Legal Center, our attorneys have handled multiple cases involving tax fraud, including:

Defending Tax Fraud prosecutions - Our extensive tax experience serves us well in representing clients faced with criminal tax investigations conducted by the IRS, or the Tax Division of the Department of Justice.

Identity Theft – This type of fraud occurs when someone uses your personal information to fraudulently file a tax return and claim a refund. It is important to act fast when you suspect there has been identity theft because recovery of your refund can become extremely difficult as time passes.

Return Preparer Fraud – Roughly two thirds of tax filers will file with the assistance of a tax return preparer. Return preparer fraud occurs when the preparer overstates deductions/credits on behalf of the taxpayer in order to increase the refund. Then, the prepare will either retain the entire refund and move their operation, or return a portion of the refund and retain the portion fraudulently obtained leaving the taxpayer responsible for any subsequent investigation.
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Phishing Tax Scams - Scammers will often send emails or create sites that appear to be legitimate, from the IRS or tax preparation software. The IRS does not send emails to taxpayers, therefore, if you receive an email asking for personal information for your tax filing it is likely a fraudulent attempt to obtain information.


​TAX EVASION

Tax evasion is defined as an intentional wrongdoing, on the part of a taxpayer, with the specific purpose of evading a tax known or believed to be owing. Therefore, tax evasion requires both, a tax due and owing, and fraudulent intent to avoid payment. The following are the most common types of tax evasion.

Return Fraud -  This is the most common type of tax evasion among individual filers. Return fraud occurs when an individual claims deductions/credits that they are not entitled to in order to reduce taxable income or increase their tax return. It is important to note that taxpayers are legally responsible for the information on their tax return even if it is prepared by a professional. Individuals are responsible for the representations made on their returns even if they did not prepare the filings themselves.

Hiding Income Offshore - It is not illegal to have cash, brokerage accounts or other investments in foreign countries. It is, however, illegal to use those accounts to evade U.S. taxes by hiding that income. There are significant reporting requirements for offshore assets, including FBAR (Report of Foreign Bank and Financial Accounts) filings. Those taxpayers who do not properly report and disclose those accounts are breaking the law and could face civil and criminal penalties and fines.
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False Business Ownership - This type of evasion occurs when an individual files a Schedule-C with their income tax return and claims a loss from the “business” that they claim they operated during the year. This loss is then used to reduce taxable income.
A charge of tax fraud/evasion can result in imprisonment for up to five years, or up to a $250,000 fine for individuals ($500,000 for corporations). Accordingly, it is extremely important to retain representation when facing a tax fraud/evasion accusation.  

 
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  • HOME
  • PRACTICES
    • Bankruptcy Law >
      • Chapter 7
      • Chapter 11
      • Chapter 12
      • Chapter 13
      • Loan Modification
      • Creditor Representation
      • Assignments for the Benefit of Creditors (“ABCs”)
    • Tax Law >
      • Tax Audits
      • Tax Fraud & Tax Evasion
      • Tax Preparer Penalties
      • Offer-in-Compromise (“OIC”)
      • Florida Sales Tax Problems
      • Offshore Bank Account (“OVDI”)
      • Innocent Spouse Defense
      • Installment Payment Agreement
      • Individual & Business Tax Preparation
    • Business & Commercial Law >
      • Business Formation
      • Business Transactions
      • Work-outs & Restructuring
      • Franchise Law
      • Not for Profit
      • Buying or Selling a Small Business in Miami
    • Real Estate Law >
      • Real Estate Transactions
      • Foreclosure Defense
      • Short Sales
      • Loan Modification
      • Tenant Landlord Disputes
      • Homeowner’s Association
    • Immigration Law >
      • U.S. Greencards
      • U.S. Visas
      • Citizenship
      • Investor Visas
      • Adjustment of Status
      • Labor Certification
  • PROFESSIONALS
    • Paula Gonzalez
    • Aramis Hernandez, Esq.
    • Greg Rice Jacobs, Esq.
    • Anna Zhuromskaya, Esq.
  • BLOG
  • CONTACT US