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Faced 5+ Years in Prison

People Vs Joseph Amico

Covered by NYDaily News. Las Vegas man accused of threatening a prominent attorney and making vile remarks.

Faced 10+ Years in Prison

People Vs. Anna Sorokin

Covered by New York Times, and other outlets. Fake heiress accused of conning the city’s wealthy, and has an HBO special being made about her.

Faced 3+ Years in Prison

People Vs. Genevieve Sabourin

Accused of stalking Alec Baldwin. The case garnered nationwide attention, with USAToday, NYPost, and other media outlets following it closely.

Faced Potential Charges

Ghislaine Maxwell Juror

Juror who prompted calls for new Ghislaine Maxwell trial turns to lawyer who defended Anna Sorokin.

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What Exactly Is Considered Tax Fraud?

What Exactly Is Considered Tax Fraud?
At its simplest, tax fraud is cheating on one’s tax return in order to avoid paying what they owe to the federal government. Countless essential services rely on tax dollars, including national defense, health and scientific research, highway construction and maintenance and emergency assistance after natural disasters. When an individual or business willfully falsifies their tax returns, they may be investigated by the Internal Revenue Service (IRS) for tax fraud. This is a serious federal crime, and the penalties range from $100,000 in fines and five years in prison for an individual to $500,000 in fines and prison time for the responsible individual at a corporation. Convicted individuals or corporations must also pay for the costs of prosecution and pay the penalties and proper amount of taxes owed on their income. If you’re concerned about potential charges and conviction for tax fraud, it’s important to understand what exactly the crime is and how the government prosecutes it.

Claiming False Deductions

One type of tax fraud the IRS investigates relates to false or fraudulent deductions. Because deductions are a way to lower an individual’s or company’s tax burden, they are a common source of fraud on tax returns. For example, an individual might take a deduction for more children than they actually have. A business owner might deduct costs of equipment they didn’t purchase. If the false deduction was an honest mistake, the person may only have to pay late fees and the amount of tax they owed on the amount of the false deduction. However, if the person is convicted of tax fraud for the false deduction, the penalties are more serious.

Claiming Personal Expenses as Business Expenses

Claiming a personal expense as a business expense is another type of tax fraud. For example, the Columbus Dispatch reports that in a recent investigation into the Columbus Zoo and Aquarium, the president and CEO of the zoo were found to have used zoo funds for personal expenses, and those expenses were listed as business expenses on the zoo’s taxes. This investigation is ongoing, but the two associated individuals have resigned. The zoo lost its accreditation as a result of the investigation. There is some gray area in claiming personal expenses as business expenses. A person who is self-employed may purchase a desk, desk chair and lamp for use in their home office. If they also pay their personal credit card bill or sit at the desk while reading for leisure, they cannot deduct the full amount of those purchases as business expenses.

Not Reporting Income

Not reporting income is a common type of tax fraud, reports the IRS. This is referred to in common language as “working under the table.” The practice is more common in some industries than others. In restaurants, servers and cooks might work under the table, get paid cash and not report their income. The restaurant owner may not report their payroll to the IRS in order to avoid payroll taxes. Childcare and agriculture are two other industries in which working under the table is a common form of tax fraud for individuals and businesses.

Overstating Losses

Losses are a type of deduction that self-employed individuals and business owners can use on their tax returns. However, overstating loses is a type of tax fraud. A person or business might inflate the value of a property or the depreciation of equipment in order to reduce their tax obligation.

Overstating Value of Donations

Donations are a way for individuals and businesses to reduce their tax burden. It becomes fraud if the value of the donation is overstated. For example, if a person donates a pair of used jeans to the Salvation Army, they should list the value of the garment as the same price as what the Salvation Army sells the item. If the person claims the value of the used garment is $100, but the Salvation Army sold it for $4, this is a type of tax fraud.

Not Handing Over Taxes Collected

When businesses make sales to customers, they have an obligation to collect sales tax and other types of taxes, such as gasoline tax or luxury goods taxes on the item or service. If the business fails to turn over those taxes to the government, it is committing tax fraud.

Using a False Social Security Number or Tax ID Number

Using a false Social Security number when working or when filing taxes may be considered both identity theft and tax fraud. It is tax fraud if the person does it in order to avoid paying taxes. It may also be tax fraud if the person uses the number in order to get an illegitimate tax refund. Businesses that use a fraudulent tax ID number to avoid tax payments or reap an undeserved refund may face similar tax fraud charges.

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