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What is the Statute of Limitations for Tax Fraud in the United States?

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What is the Statute of Limitations for Tax Fraud in the United States?

In the law, a statute of limitations is a rule governing when prosecutors must file a criminal case against you before losing the right to do so. This rule is designed to prevent criminal charges from being brought in a case where the evidence is too stale, and things happened too long ago. Tax crimes in the United States, specifically tax fraud, also have a statute of limitations. However, the statute of limitations will vary depending on the exact nature of the tax crime with which you were charged, whether your behavior was willful, among other factors.

Anytime you are charged with a crime involving tax fraud, you should reach out to a skilled dually licensed Criminal Tax Defense Attorney and CPA like those on the team at the Law Offices of David W. Klasing as soon as possible. In fact, the best time to reach out to us is before you file your taxes, so our dual lawyers and CPAs can assure everything is done legally, and you can avoid issues down the line. While we discuss the statute of limitations for tax crimes here, there are always differences depending on each person’s situation. You should never make any decisions without consulting with an attorney first.

Statutes of Limitations for Tax Fraud Crimes

As noted above, the statute of limitations is the amount of time after the crime occurs that the authorities have to file charges against you. For example, the statute of limitations is one year for some crimes, meaning that the charges relating to this incident can be filed no later than the one year after the incident took place. The general rule is that the statute of limitations for tax crimes related to the filing of a false tax return starts on the day the return is filed. However, if you file the return early, the statute of limitations will not begin running until the statutory filing date. Again, this can vary with specific crimes, and in some cases, the statute of limitations can be extended. It is always best to speak with a skilled tax attorney like those at the Law Offices of David W. Klasing, who can give you the most accurate and complete analysis and advice.

“Tax fraud” is not a specific crime under the United States Criminal Code. Rather, there are a series of crimes, like deliberately underreporting income or claiming deductions to which you are not actually entitled, that are described under the umbrella term of tax fraud. Other tax crimes may be considered tax fraud or may not, depending on who you speak with. In any case, below, we list the statute of limitations for some of the most common tax fraud charges and other tax crimes.

Lies, Misstatements, Mistakes, and Concealment or Furtherance of Tax Evasion Will Reset the Statute of Limitations Period

A concept called “the last affirmative act” is also important to keep in mind.  If you are questioned about tax crimes that occurred 20 years ago, for example, and lie about it, that lie is the last affirmative act of the crime and it occurred within the 6 year statute of limitations bringing the crime from 20 years ago into the six year statute of limitations.

How Can A Knowledgeable Criminal Tax Defense Attorney Help Me if I Have Committed Tax Fraud?

It is never a good idea to try to wait out the statute of limitations. More times than not, the IRS will catch up with you in enough time to file charges. Furthermore, as noted above, the statute can be extended under certain special circumstances, and the date on which the statute for each crime starts to run varies. Instead, if you know you have committed some sort of tax crime, whether willfully or non-willfully, reach out to an experienced criminal tax defense attorney like those at our firm. We can assess the specifics of your situation and start working to mitigate the damage as much as possible.

In some cases, you may benefit from an domestic or offshore IRS voluntary disclosure or streamlined disclosure program, where you come forward voluntarily and correct your past mistakes and pay the IRS what you owe, plus some fines. However, you will not have to face the highest civil fines or the most severe potential penalties, like jail time. In other cases, especially for small, non-willful errors, we may simply be able to amend your tax returns and have you pay back what is owed. If you have already been charged with a tax crime and believe that the statute of limitations has been violated, we can file a motion to dismiss the case based on this and argue in court that the law should be applied as written.

Note:  As long as a taxpayer that has willfully committed tax crimes (potentially including non-filed returns coupled with affirmative evasion of payment) self-reports the tax fraud (including a pattern of non-filed returns) through a domestic or offshore voluntary disclosure before 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, Kovel CPAs 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!

Call Our Battle-Tested Tax Attorneys and CPAs Today

If you believe that you have committed a tax crime, trying to wait out the statute of limitations is not the solution. The IRS is known to be on top of these sorts of matters, and they are very aggressive at examining returns and referring potential issues for audits and criminal investigations. Besides the stress of waiting up to 6 years in fear of incarceration is bad for your health. Before getting to this point, after which voluntary and streamline disclosure will likely not be an option, contact a veteran tax lawyer like those at the Tax Law Offices of David W. Klasing right away. We will work to get you back into compliance with as few negative ramifications as possible. To set up a confidential consultation, call our firm today at (800) 681-1295.

We Are Here for You

Regardless of your business or estate needs, the professionals at the Tax Law Offices of David W. Klasing are here for you. We are open for business and our team will help ensure that your business is too. Contact the Law Offices of David W. Klasing today to discuss your business with one of our professionals.

In addition to our main office in Irvine, the Tax Law Offices of David W. Klasing has unstaffed (conference room only) satellite offices in Los Angeles, San Bernardino, Santa Barbara, Panorama City, Oxnard, San Diego, Bakersfield, San Jose, San Francisco, Oakland, Carlsbad and Sacramento. During the COVID-19 pandemic, our staff are working from home, but have full virtual meeting capability.

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