Tax season has come to a close, providing a good opportunity to review the process taken by the Internal Revenue Service (IRS) when reviewing taxes. Although most taxpayers likely filed in compliance with tax law, there are those who have not. At least that is what the IRS believes.
In some cases these alleged mistakes are likely accidental. If the allegations prove correct, penalties for such mistakes can range from a minor monetary fee to potential prison time, depending on the details of the error. However, the IRS may accuse others who have made alleged mistakes on their tax filings of actions so egregious they raise to the level of potential criminal charges, leading to the following question: when are tax mistakes criminal?
Although the exact circumstances that result in criminal charges will vary depending on each situation, some examples of criminal tax activity include allegations of the following:
1. Intentional evasion. One of the most common examples of criminal tax charge involves allegations of tax evasion. The IRS may accuse a tax payer of intentionally failing to report income or otherwise avoid tax obligations. The agency would then gather evidence in an attempt to support charges of tax evasion.
2. Hidden assets. The IRS is cracking down on a failure to properly report foreign assets. Criminal charges are possible in the event the agency believes that the taxpayer has intentionally failed to report these assets.
3. Obstruction of collection efforts. A taxpayer that is accused of obstructing attempts by the agency to collect taxes could also face criminal charges. Past convictions of this nature have included taxpayers that have shifted funds to various bank accounts in an effort to keep the money from becoming susceptible to a levy put in place by the IRS.
These are just three examples of tax mistakes that could translate to criminal charges. Anyone that is accused by the IRS of criminal activity should take the accusations seriously and promptly contact an attorney. An experienced tax lawyer, like those at Robert J. Fedor, Esq., L.L.C., can review the accusations and better ensure your legal interests are protected.
