Allegations of tax fraud can happen to anyone. The allegations can be made against the tax filings of a single individual or a large corporation. The penalties that result can be crippling both to current finances and to the social reputation of the accused, making rebounding from the accusations difficult.
One company currently dealing with such tax fraud accusations is a mega-giant in the construction industry, Caterpillar. Their yellow diggers, dump trucks and other forms of construction equipment with the large CAT branding on the side is easily recognizable. The company has made billions and these earnings are currently being questioned by the Internal Revenue Services (IRS).
This is not the company’s first brush with tax fraud allegations. A recent piece by CNBC notes that Caterpillar was on the government’s radar for over thirteen years. Concerns began when the business began moving earnings to a foreign subsidiary in Switzerland in an effort to reduce tax obligations.
What are the allegations? It is important to clarify that the allegations are found in a report completed for a federal agency. Actual charges have yet to be filed.
The report accuses the company of “bringing home billions of dollars from offshore affiliates while avoiding federal income taxes on those earnings.” The report goes on to explain that these violations rise above the level of negligence into fraud — an accusation that would result in steeper penalties if supported by evidence.
What kind of penalties could apply in this situation? A wide range of penalties could apply depending on whether charges are based on negligence or fraud. The company has disclosed that the Internal Revenue Service (IRS) is claiming that the interaction with the company and its Swiss subsidiary has made Caterpillar responsible for over $2 billion in income taxes and penalties.
Caterpillar is “vigorously contesting” the IRS in this matter.
In the event you are approached by an IRS agent inquiring about failure to file or any other aspect of taxation of your business, you should speak with an experienced criminal tax lawyer at Robert J. Fedor Esq., LLC. In that way, your rights will be protected and you can begin the process of resolving outstanding income tax problems with the IRS.
