Philadelphia Federal Tax Evasion Charges: IRS Investigations and Audits

Philadelphia Federal Tax Evasion Charges: IRS Investigations and Audits

Dealing with the IRS can be intimidating. Many people panic when they get tha dreaded letter in the mail saying their being audited or investigated for possible tax evasion. But don’t freak out! This article will walk you through what happens during a federal tax investigation, what tax evasion charges are, and your defense options if your facing charges in Philadelphia.

IRS Audits and Investigations in Philadelphia

Theres a few ways the IRS may look into your taxes if they suspect your not paying what you owe:

• Random audits – The IRS selects tax returns at random every year for review. Just bad luck if they pick you!
• Document matching – The IRS compares the income you reported to forms like W-2s sent in by employers. If theres a mismatch they’ll want to know why.
• Related audits – If they audit one year’s return and find problems, they may look at other years too.
• Targeted campaigns – Sometimes the IRS focueses on specific industries, deductions, credits, etc if they notice lots of errors.

And then theres criminal investigations if they think you intentionally evaded paying taxes. This is when they bring out the big guns – IRS special agents who carry badge’s and guns! They’ll dig deep into your financial life and might raid your home or office seizing records and computers. It can get intense.

Tax Evasion Charges in Philadelphia

OK, so what laws are we actually talking about here? Tax evasion refers to illegally not paying taxes your required too. There’s a few specific charges the Department of Justice likes to use in Philadelphia:

• Tax Evasion – Section 7201 of the IRS code makes it a felongy to willfully attempt to evade paying federal income taxes. Penalties include fines up to $100,00 and jail time up to 5 years.
• False Statements – Its illegal under Section 7206 to make false statements on your tax returns, like under-reporting income or falsely claiming deductions. Fines up to $100,000 and 3 years in prison.
• Failure to File – Simply choosing not to file a return your required to under Section 7203 brings fines up to $25,000 and a 1 year max sentence.

;So if your not reporting all your income, lying about business expenses, hiding money overseas, or just not bothering to file your putting yourself at risk of prosecution.

Defenses in Philadelphia Federal Tax Cases

Now don’t panic! Just because the IRS is looking into your taxes doesn’t mean your definitely getting charged. Lots of audits and investigations end with no penalties. Maybe some back taxes owed and interest, but no criminal case. And if they do want to prosecute, you have defense options in Philadelphia:

• Reliance on a Tax Professional – This is a common defenses where you show errors were unintentional and you relied on a CPA or tax preparer’s advice. Might still owe back taxes but avoid jail.
• Lack of Willfulness – For charges like tax evasion you need to show prosecutors the government can’t prove you “willfully” violated tax laws. Maybe you didn’t understand the complex laws or made a mistake.
• Statute of Limitations – For criminal tax charges the IRS has 6 years to prosecute after you file a return. If they discover a past return with errors or omissions outside that window, your off the hook!

And of course, you can always appeal if initially convicted. An experienced tax attorney can help evaluate defenses and negotiate with the IRS and DOJ during the audit process and through trial. They know how to stand up to aggressive IRS agents!

The tax laws can be overwhelmingly complicated, especially with things like offshore accounts, cryptocurrency, business deductions, and more. So don’t be afraid to admit you need help from both a CPA and tax attorney if the IRS comes knocking in Philadelphia!

Citations

26 U.S. Code § 7201. Attempt to evade or defeat tax

26 U.S. Code § 7206. Fraud and false statements

26 U.S. Code § 7203. Willful failure to file return, supply information, or pay tax