Bakersfield, CA IRS Fraud Defense Attorney + CPA
Tax fraud can take many forms, such as concealing bank accounts from the IRS, deliberately failing to file U.S. income tax returns, or failing to collect and pay over FICA taxes as an employer. But no matter what sort of allegations have given rise to a criminal tax charge or IRS or California criminal tax investigation, the smartest and most effective response is to consult an experienced, dedicated, and knowledgeable tax defense attorney, like the Bakersfield tax lawyers at the Tax Law Office of David W. Klasing. Supported by a team of CPAs and Kovel accountants who work under the Attorney Client Privilege to assist our Attorneys in providing your defense. Serving the Bakersfield, CA region, our criminal tax defense attorneys are here to provide the aggressive representation you need when facing the IRS, EDD, FTB, CDTFA or U.S. Department of Justice.
Is Tax Fraud the Same as Tax Evasion?
The terms “tax fraud” and “tax evasion” are sometimes used interchangeably. All acts of tax evasion constitute tax fraud, but tax fraud does not always involve tax evasion. That is because “tax fraud” is a broad, general term that covers numerous tax offenses – only one of which is tax evasion (26 U.S. Code § 7201). Other crimes that are also examples of tax fraud include:
- Aiding and Assisting a False Return (26 U.S. Code § 7206(2))
- Tax Obstruction (26 U.S. Code § 7212)
- Willful Failure to Collect or Pay Over Tax (26 U.S. Code § 7202)
- Willful Failure to File Return, Supply Information, or Pay Tax (26 U.S. Code § 7203)
- Willfully Making and Subscribing a False Return (26 U.S. Code § 7206(1))
While these offenses are all defined differently, all share one feature in common: each involves a “willful,” or intentional, effort to violate one or more provisions of the U.S. Tax Code, or Internal Revenue Code (IRC). In short, tax fraud entails any sort of deliberate attempt to cheat or deceive the IRS. Related offenses that are frequently charged alongside the aforementioned tax crimes include:
- Bank Fraud (18 U.S. Code § 1344)
- Conspiracy to Commit Offense or Defraud the United States (18 U.S. Code § 371)
- Identity Theft (18 U.S.C. § 1028)
- Money Laundering (18 U.S. Code § 1956)
- Wire Fraud (18 U.S. Code § 1343)
Can Someone Report Me to the IRS for Suspected Tax Fraud?
In short: yes. In fact, at the recommendation of the Treasury Inspector General for Tax Administration (TIGTA), which can be viewed here, the IRS has made efforts to improve its criminal tax referral procedures, making it easier and more effective for tax whistleblowers to report suspected fraud. To report fraud to the IRS, all a taxpayer needs to do is file the appropriate form (typically Form 3949-A, Information Referral), which may be completed anonymously if he or she wishes. The convenience of this process – and the increasing level of efficiency with which the IRS is responding – poses serious dangers for taxpayers with histories of willful noncompliance. Even more worrisome is that the IRS is offering financial incentives from 15 to 30% of the income tax recovered to encourage whistleblowers to come forward.
Can You Go to Jail for Tax Fraud?
Since it is a crime to engage in tax fraud, prison time is a potential consequence – along with high fines and supervised release. Sentencing is contingent on numerous factors, including but not limited to the following:
- Statutory maximums, which vary from offense to offense
- Note under the sentencing guide lines a tax loss of only $30,000 is punishable by up to a year in jail.
- The defendant’s level of cooperation with prosecutors (such as participation in a plea deal)
- The judge’s discretion, taking into consideration all pertinent factors
- Whether the defendant has a history of prior offenses
A “statutory maximum” is the maximum prison sentence set by the relevant statute, or tax law. For example, the federal tax evasion statute, which is 26 U.S. Code § 7201, sets a maximum prison term of five years. Judges have some flexibility when imposing a sentence, but cannot exceed the statutory maximum, regardless of what crime is involved. Maximum sentences for tax fraud are as follows:
- For aiding and assisting a false tax return (return preparer fraud), up to three years in prison
- For impeding the IRS (committing tax obstruction), up to one, two, or three years in prison, depending on the nature of the offense
- For willfully failing to collect or pay over taxes, up to five years in prison
- For willfully failing to file or pay federal taxes, up to one year in prison
- For willfully filing a false return (making and subscribing a false tax return), up to three years in prison
Civil Tax Fraud Penalties
Civil penalties are commonly imposed in addition to the aforementioned criminal penalties for various tax frauds. One of the most devastating is the civil tax fraud penalty, which is calculated to be 75% of the underpayment resulting from the fraud. For example, if the taxpayer failed to pay $60,000 due to engaging in fraud, he or she could face a civil fraud penalty of up to $45,000.
IRS Fraud Defense Lawyer + CPA in Bakersfield, CA
If you are under investigation for tax fraud, are concerned about the potential fallout from an upcoming tax audit, or have been questioned or contacted by the IRS regarding any civil or criminal tax matter, it is crucial to take the right steps to protect yourself. For immediate assistance, call the Tax Law Office of David W. Klasing in Bakersfield at (661) 432-1480, or contact us online to arrange a reduced-rate consultation. We are available 24 hours a day, seven days a week, to counsel you in your matter. Please note that meetings at our Bakersfield tax office are by appointment only.
Note: If you have concerns about the privacy of our initial or subsequent communication and are unable to easily travel to our Irvine / Orange County Main Office, consider scheduling a GoToMeeting to safely and securely establish an initial or maintain an existing attorney client relationship. With end-to-end encryption, strong passwords and top-rated reliability, no one is messing with your meeting. To schedule a reduced rate initial consultation via GoToMeeting follow this link. Call our office and request a GoToMeeting if you are an existing client. We are generally happy to travel to any of our appointment only satellite offices for a subsequent meeting in appropriate circumstances once a relationship is established via a signed engagement letter and the payment of an initial retainer or where enough retainer is available where a current client to cover the reasonable travel time and time required for the meeting.
Will it cost me more to hire the Tax Law Offices of David W. Klasing, who’s main office and the vast majority of the firm’s staff is located in Irvine California, but an appointment only Satellite office is close to my location, as opposed to a local company? Absolutely not! See our policies that address this issue here: