President Joe Biden is wasting no time in bolstering the IRS with an additional influx of employees scheduled over the next decade. The proposal comes as part of a larger package that includes $80 billion for the department over the same time frame. With such a significant increase in capability, one might reasonably wonder whether to expect more tax code enforcement in the coming months and years.
It would only make sense that the government expects to reap what it sows. Federal officials project the cash infusion into the IRS and hiring of additional agents will bring in additional revenue that will dwarf the overall investment in the IRS. The only way that this plan comes to fruition is with a much more active, aggressive IRS. If you are concerned about the likely increase in tax code enforcement activity, you may elect to engage in a voluntary disclosure, which can protect you from criminal prosecution for past egregious intentional tax noncompliance, or cheating, for short. However, if handled incorrectly, a voluntary disclosure can do more harm to a taxpayer than good. You should only attempt to engagement in a voluntary disclosure with the guidance of a seasoned dual California licensed Criminal Tax Defense Attorney and CPA.
Note: As long as a taxpayer that has willfully committed tax crimes (potentially including non-filed foreign information returns coupled with affirmative evasion of U.S. income tax on offshore income) self-reports the tax fraud (including a pattern of non-filed returns) through a domestic or offshore voluntary disclosurebefore the IRS has started an audit or criminal tax investigation / prosecution, the taxpayer can ordinarily be successfully brought back into tax compliance and receive a nearly guaranteed pass on criminal tax prosecution and simultaneously often receive a break on the civil penalties that would otherwise apply.
It is imperative that you hire an experienced and reputable criminal tax defense attorney to take you through the voluntary disclosure process. Only an Attorney has the Attorney Client Privilege and Work Product Privileges that will prevent the very professional that you hire from being potentially being forced to become a witness against you, especially where they prepared the returns that need to be amended, in a subsequent criminal tax audit, investigation or prosecution.
Moreover, only an Attorney can enter you into a voluntary disclosure without engaging in the unauthorized practice of law (a crime in itself). Only an Attorney trained in Criminal Tax Defense fully understands the risks and rewards involved in voluntary disclosures and how to protect you if you do not qualify for a voluntary disclosure.
As uniquely qualified and extensively experienced Criminal Tax Defense Tax Attorneys, KovelCPAs and EAs, our firm provides a one stop shop to efficiently achieve the optimal and predictable results that simultaneously protect your liberty and your net worth. See our Testimonials to see what our clients have to say about us!
The California dual-licensed Criminal Tax Defense Attorneys and CPAs at the Tax Law Offices of David W. Klasing are highly experienced and comfortable taking on the federal government on behalf of our clients on daily basis. We have the universal understanding of all aspects of the tax code to ensure that you are properly advised and protected against all eventualities. You can schedule your first consultation with our offices for a reduced rate by calling us at (800) 681-1295 or by scheduling online here.
IRS Set to Undergo Massive Expansion, Including Hiring Spree
The White House has introduced a plan that would have the IRS double in size, by way of a cash infusion of $80 billion over 10 years. Sponsored by the treasury department, President Biden specifically intends for the implementation of these changes to yield a higher success rate in enforcement of tax code violations by the highest income earners.
The plan provides for the introduction of roughly 87,000 new IRS employees over the 10-year period. The workforce expansion would be limited to 15% annually to avoid overwhelming the current system, but the announcement of such high numbers is clearly intended to scare would-be tax evaders into returning to a state of tax compliance.
The estimated annual difference between taxes owed and taxes collected, often caused by intentional noncompliance, has risen dramatically in recent years and poses a significant problem for the United States government. This anomaly, also known as the “tax gap,” implies that recent tax evasion schemes have become so sophisticated that they have to date been largely successful in avoiding the gaze of the IRS’ Criminal Investigations Division (IRS-CI).
Officials suggest that this is due to several factors, including the lagging technological savvy possessed and antiquated computer equipment utilized by the agency as well as the overwhelming burden that the currently understaffed department carries. This burden only grew during the COVID-19 pandemic, as the IRS was tasked with, amongst other responsibilities, issuing pandemic relief checks to most Americans.
The popularity and brazenness of domestic and offshore tax evasion schemes, particularly those involving offshore entities, is estimated to cost the IRS and the federal government well over $500 billion per year. IRS Commissioner Chuck Rettig told reporters in March that this figure could be timid, and even suggested that the tax gap could currently be as much as $1 trillion annually.
What Does an IRS Hiring Spree Mean for Taxpayers?
The Biden IRS expansion proposal represents the single largest supplement for the IRS in decades. Rest assured that the Biden administration is not taking this step lightly. They expect a return on their investment. In fact, the administration suggested in announcing the proposal that they are expecting to recoup roughly $700 billion in unpaid taxes over the next decade.
The only way that the federal government hits this benchmark is through increased enforcement action. In other words, the IRS will have to spend that money to make money. The money will go towards hiring more staff, but it will also go towards upgrading their technological capabilities to be able to handle higher enforcement workloads. The money will also find its way into tax litigation & prosecution, allowing prosecutors to mount longer, more effective cases against criminal tax perpetrators.
Will Voluntary Disclosure Protect Me from Increased IRS Enforcement Actions?
With tax audits and criminal tax investigations likely on the rise, many taxpayers may be concerned about their level of past tax code compliance. If you are genuinely concerned about what a tax audit might uncover in the way of intentional noncompliance, it may be in your best interest to engage in a domestic or offshore voluntary disclosure.
Voluntary disclosure is a government-implemented program that allows for taxpayers who have previously intentionally fallen out of tax compliance with the Internal Revenue Code (IRC) to come clean with the government. A taxpayer may voluntarily disclose additional information on their past tax liability to clear their name and come above board with their situation and get right with the government without facing criminal tax prosecution if the terms of the program are strictly complied with.
After auditing & assessing a voluntary disclosure, IRS officials will come to a decision on the taxpayer’s actual outstanding tax liability including penalties and interest. Depending on the nature of the noncompliance, the IRS will impose impose civil penalties, including the civil fraud penalty, but they can choose to waive or reduce the scale of these penalties based on the taxpayer’s decision to fully cooperate and on the facts and circumstances regarding a taxpayer’s overall record of compliance and nature of any underlying noncompliance.
However, voluntary disclosure is not a viable solution in all cases. In some instances, voluntary disclosure may not absolve the taxpayer of certain criminal conduct and may even implicate the taxpayer for the purposes of criminal prosecution. You should absolutely have the counsel of an experienced dually licensed California Criminal Tax Defense Attorney & CPA before deciding whether to engage in a domestic or offshore voluntary disclosure program.
Our Dual-Licensed Tax Defense Attorneys and CPAs Can Protect You Today
At The Tax Law Offices of David W. Klasing, we have the experience and resources to shore up your defenses against the impending onslaught of IRS enforcement actions. To schedule your initial consultation for a reduced rate, call our offices today at (800) 681-1295 or schedule online here.
More Commonly Asked Tax Audit Questions
- How should Tax Audits be Handled by Criminal Tax Counsel?
- How to survive audit when I cheated on return being audited
- What is an eggshell audit?
- What is a reverse egg shell audit?
- Why is a reverse egg shell audit dangerous for a taxpayer?
- Warning signs of a criminal referral from an IRS audit
- Effective tax defense counsels goals in an egg shell audit?
- How are the 4 goals and outcomes 1 and 2 best obtained?
- What are the possible outcomes of an egg shell audit?
- Is it my right to know why I was selected for examination?
- What can I do to prepare for an audit?
- What is an IRS civil examination?
- How IRS decides which tax returns are audited
- What are my appeal options if I disagree with IRS?
- What are my basic taxpayer rights if the IRS audits me?
- Options if I am unable to pay at the conclusion of audit
- What a 30 or 90-Day Letter from the IRS means
- What is involved with appealing disagreements?
- Rights to disagree with IRS tax auditor’s findings
- Can I stop the IRS from repeatedly auditing me?
- Can I have the examination transferred to another area?
- Can I record my IRS interview and is it a good idea?
- How many years of returns are at risk during an audit?
- Common reasons for the IRS to conduct a tax audit
- How to avoid negative consequences from an IRS interview
- Have to agree to interview by taxing authority directly?
- Are all audits the same?
- What should I do if the IRS is investigating me?
- What if I don’t respond to a taxing authority audit notice
- Your rights during an IRS tax audit
- Risks of attending an IRS audit without a tax lawyer
- Most common audit technique used by taxing authorities
- Don’t go into an IRS audit without representation
- Why hire an attorney to represent me in an audit?
- Why hire David W. Klasing to represent me in an audit
Questions and Answers for Criminal Tax Representation
- When tax defense counsel parallels tax crime investigation
- Guilty of tax obstruction by backdating documents?
- To be found guilty of tax obstruction must a person actually be successful in impeding the IRS’s functions?
- Help! The Document I Gave the IRS Had False Information
- Tax crime aiding or assisting false return IRC §7206(2)
- What is the crime known as tax obstruction § 7212?
- What is the difference between tax perjury and tax evasion?
- What is the tax crime commonly known as tax perjury?
- What is a Klein Conspiracy?
- Increased possibility of civil action in IRS investigation
- Am I Guilty of Tax Evasion if the Law is Vague?
- What happens if the IRS thinks I committed tax crimes?
- What are ways to defend against a tax evasion charge?
- Difference between criminal tax evasion and civil tax fraud
- What accounting method does the IRS use for tax fraud
- Can I Change Accounting Method to the Accrual Method
- What is the willfulness requirement for tax evasion?
- I didn’t know I committed tax fraud. Can I get off?
- Concealed assets from IRS. Can I avoid tax evasion charges
- How government proves I willfully engaged in tax evasion
- What is the venue or court where a tax crime case is heard?
- Must the IRS prove tax crimes beyond a reasonable doubt?
- Is it a crime to make false statements to the IRS?
- Will the IRS overlook my tax evasion if it’s minor?
- Failed to tell IRS about my nominee account
- Audit risk with cash based business transactions
- How to defend a client charged with tax evasion
- Is it tax evasion if I didn’t file income tax return?
- Government says I attempted to evade my taxes. Now what?
- I forgot to pay my taxes or estimated tax. Is this a crime?
- Government proof I “willfully” failed to pay taxes
- 5 Ways to Respond to Tax Evasion Charges
- Being audited after using a tax professional
- Rules for what an IRS agent can do while investigating me
- How tax preparers, attorneys and accountants are punished
- How the IRS selects tax crime lead for investigation
- How does the IRS prosecute suspected tax crimes?
- Does IRS reward informant leads for suspected tax crimes?
- How the government proves deficiency in a tax evasion case
- Do prior tax crimes factor into new IRS tax convictions?
- Requesting conference before investigative report is done
- Requesting conference after IRS Special Agent Report
- What are my rights during an IRS criminal investigation?
- Avoid prosecution for tax crime with voluntary disclosure?
- Defense tactics that make it hard for to prove willfulness
- How a tax attorney can stop your criminal tax case?
- What can you generally tell me about tax crimes?
- Continuing filing requirement with investigation pending
- Federal criminal code crimes that apply to tax issues
- Penalty for making, subscribing, and filing a false return
- CID special agent’s report for criminal prosecution
- What is the discovery process in a criminal tax case?
- What the IRS includes in indictment for tax case
- What is the hardest element of a tax crime to prove?
- IRS methods of gathering evidence to prove tax crime
- What does a grand jury do in IRS tax crime prosecution?
- Failure to keep records or supply information
- Failure to make a return, supply information, or pay tax
- What is attempting to evade payment of taxes?
- What is income tax evasion and how is it punished?
- What is attempted income tax evasion?
- What is the crime of failure to pay tax? What is punishment
- Crime of making or subscribing false return or document
- Criminal Investigation Division investigation tactics
- Tax crimes related to employment tax forms and trust funds
- Tactics to defend or mitigate IRS criminal tax charges
- How the IRS generates leads about suspected tax crimes
- What is the crime ”evasion of assessment” of tax?
- Specific examples of “attempting” to evade tax assessment
- What is the so-called Spies evasion doctrine?
- Does overstating deductions constitute tax evasion?
- Is it tax evasion if my W-4 contains false statements?
- IRC §7201 attempt to evade vs. common-law crime of attempt
- What are the penalties for Spies tax evasion?
- How government proves a taxpayer attempted tax fraud
- What is a tax that was “due and owing.”
- What is evasion of assessment for tax liability?
- Is evasion of assessment different from evasion of payment
- Does the IRS have a dollar threshold for tax fraud?
- What is the IRS burden of proof for tax fraud convictions?
- Are Tax Laws Constitutional?
- What is the source of law that defines tax evasion?
- Does section 7201 create two distinct criminal offenses?
- Does tax evasion definition include partnership LLC
- What if I helped someone else evade taxes?
- Is it illegal to overstate deductions on my tax return?
- Is it illegal to conceal bank accounts from the IRS?
- Do later losses justify prior deductions?
- Common reasons the IRS and DOJ start investigations
- What is the Mens Rea component of tax crimes?
- What is a proffer agreement and what are the risks?
- Why to have an attorney to review a proffer agreement
- Why enter into a proffer agreement?
- Limited use immunity from proffer agreements
- Difference between civil and criminal fraud allegations
