With the holiday season in full swing, it is likely that very few Americans are counting down the days until the 2015-tax year filing season begins. That being said, many taxpayers will make poor choices when preparing their returns. Although the temptation is great, taxpayers should take measures to ensure that their tax positions and calculations are completed with as much care as possible. The IRS is ruthless in their hunt for tax cheats and as evidenced by the story below, will lock up anyone, including their own, for violating tax laws.
According to reports from multiple news agencies, federal authorities have arrested and charged three individuals with crimes that include mail fraud, bank fraud, theft of government funds, aggravated identity theft, and unauthorized access to a protected computer. The grand jury indictment came after the IRS Criminal Investigation Division and Department of Justice became aware of a tax refund scheme that was being perpetrated by three individuals, one of which was an employee of the IRS.
Nakeisha Hall, Jimmie Goodman and Abdulla Coleman were indicted by a federal grand jury earlier this month in connection with tax refund scheme that is estimated to have generated over $1 million in false refund payouts. Hall, an employee of the IRS in the Taxpayer Advocate Service (TAS) office in Nebraska, was arrested at her home on Tuesday, along with Goodman. Coleman was already under arrest in the State of Wisconsin on unrelated charges.
The trio faces a plethora of negative consequences if they are convicted. In addition to facing several years in a federal prison, Hall, Goodman, and Coleman will likely be subject to steep monetary penalties.
Although the three individuals who were indicted were not caught making false statements on their personal tax returns, the incident does show how seriously the IRS and the Department of Justice take the administration of the tax code. There are many taxpayers out there who believe that they will not be subject to an IRS or state audit because of the sheer amount of tax returns that the IRS receives on a yearly basis. But that is simply not a sufficient justification for a taxpayer to cheat on their taxes.
The IRS has sophisticated systems in place that flag certain tax returns for audit. Once a tax return is flagged, it ends up in the hands of an IRS agent who is specially trained to look for inaccurate and misleading information. Upon an examination, IRS field agents will heavily scrutinize the tax return and won’t hesitate to hand the case over to the IRS Criminal Investigations Division. There, agents will determine whether the taxpayer intentionally violated the law when preparing their tax return, at which point, the Department of Justice could get involved.
The bottom line is that if you have a tax position that may raise eyebrows at the IRS, you should consult with an experienced tax attorney before the IRS comes knocking at your door. An objective analysis by a tax attorney who is also a Certified Public Accountant could save you from the negative consequences that come with being audited, investigated, and potentially charged for committing a tax crime. Whether the issue pertains to individual, corporate, or foreign income or estate taxation, the tax and accounting professionals at the Tax Law Offices of David W. Klasing can effectively assist.
If you have already received a notice of examination or have been notified that you are being investigated, you have little choice but to contact a tax attorney as soon as possible. Because tax fraud, evasion, and other crimes can carry sentences of several years in a federal prison, nipping a criminal tax issue in the bud is critical. Many taxpayers attempt to navigate examinations and interviews alone, but end up making things much worse by making incriminating statements or giving the IRS a reason to open audits for additional years. Don’t let the IRS or Department of Justice get the best of you, contact the Tax Law Offices of David W. Klasing today for a reduced-rate consultation.