Civil Tax Fraud Penalties - How Does IRS Enforce Civil Tax Fraud? (Golding & Golding)

Civil Tax Fraud Penalties – How Does IRS Enforce Civil Tax Fraud? (Golding & Golding)

Civil Tax Fraud Penalties – How Does IRS Enforce Civil Tax Fraud?

When it comes to the IRS, some tax violations are worse than others. Generally, tax fraud — even civil tax fraud — can have serious tax consequences.

Not only are the penalties for civil tax fraud, steep, but a Civil Tax Fraud Penalty may lead to additional penalties — and may even result in an IRS Special Agent investigation, which can can lead to a recommendation for criminal prosecution.

Civil Tax Fraud Penalties

Civil Tax Fraud Penalties are tough.  Here’s why:

Civil Tax Fraud Statute of Limitations

There is no limitation on the time limit the IRS has to enforce Civil Tax Fraud Penalties. In other words, while most statute of limitations tend to expire after 3-6 years, the IRS is not limited to these time restraints.

What is the Level of Proof the U.S. Government Needs?

Unlike criminal tax crimes (in which the government must prove “beyond a reasonable doubt”) or general civil tax statutes (which typically require mere “preponderance of the evidence” aka more likely than not), Civil Tax Fraud Penalties fall somewhere in the middle/

The standard of proof is called “clear and convincing evidence.” While the level proof is not quantified in the statute, it tends to be considered about 75% proof.

IRS Civil Tax Fraud Penalty?

As provided by Internal Revenue Code section 6663:

If any part of any underpayment of tax required to be shown on a return is due to fraud, there shall be added to the tax an amount equal to 75 percent of the portion of the underpayment which is attributable to fraud.

International Component as well

The IRS has made offshore tax enforcement a key enforcement priority. If the IRS believes a person acted fraudulently and willfully in failing to report foreign accounts, assets, investments, and/or income — the IRS may seek to recover penalties upwards of 50% value of the maximum value of accounts & assets.

In other words, if the IRS believes a person acted fraudulent, it may make it easier for the IRS pursue ancillary penalties beyond just tax fraud — and these penalties can be much worse than  tax fraud penalties alone.

Golding & Golding, Board Certified Tax Law Specialist

We have successfully represented clients in more than 1,000 streamlined and voluntary disclosure submissions nationwide and in over 70-different countries.

Golding & Golding is the “go-to” firm for other Attorneys, CPAs, Enrolled Agents, Accountants, and Financial Professionals across the globe.

Golding & Golding (Board Ceritfied Specialist in Tax Law)

Golding & Golding (Board Certified Specialist in Tax Law)

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Golding and Golding, Board-Certified Tax Law Specialist

Golding and Golding, Board-Certified Tax Law Specialist

Golding & Golding: Our international tax lawyers practice exclusively in the area of IRS Offshore & Voluntary Disclosure. We represent clients in 70+ different countries. Managing Partner Sean M. Golding is a Board-Certified Tax Law Specialist Attorney (a designation earned by < 1% of attorneys nationwide.). He leads a full-service offshore disclosure & tax law firm. Sean and his team have represented thousands of clients nationwide & worldwide in all aspects of IRS offshore & voluntary disclosure and compliance during his 20-year career as an Attorney.

Sean holds a Master's in Tax Law from one of the top Tax LL.M. programs in the country at the University of Denver. He has also earned the prestigious IRS Enrolled Agent credential. Mr. Golding's articles have been referenced in such publications as the Washington Post, Forbes, Nolo, and various Law Journals nationwide.
Golding and Golding, Board-Certified Tax Law Specialist