False Tax Return Penalty (2018) – IRS Penalty for False Tax Returns
Filing a false tax return is a big deal, and if the IRS discovers that you filed a False Tax Return, the IRS may try to enforce Domestic and Offshore Fraud, Evasion and related penalties.
False Tax Return Penalty
Unfortunately, in the realm of filing a false tax return (or intentionally omitting), the IRS Agent may recommend that the IRS Special Agents initiate a criminal investigation.
Common IRS crimes involving False Tax Returns include:
- Tax Fraud
- Tax Evasion
- Offshore Fraud or Evasion
- Money Laundering
- White Collar Crime
How Can the IRS Find You?
Oftentimes, the IRS has more resources available to them than you might think, and the resources can be very close to home:
- Ex-Spouse or Jilted Lover
- Business Partner
- Jealous ex-Girlfriend or Boyfriend
- Just someone who doesn’t like you.
We have been handling high-stakes litigation for many years, and it is safe to say that sometimes it really is the person you would ever least expect.
Besides from exploiting people who generally suck, the IRS also has various new procedures in place such as FATCA (Foreign Account Tax Compliance Act) and J-5 — along with the creation of new Tax Enforcement Groups devoted to uncovering tax fraud.
Does the IRS Already Know?
This is where it gets very complex, and unfortunately you may find yourself in two unfriendly IRS situations that both have significantly bad repercussions:
With an Eggshell Audit, the IRS is simply auditing you – BUT, you have a secret. You know you committed a Tax Crime(s). And, you have to walk the fine line during the audit to:
– Not make any Intentional Misrepresentations
– Not make any Intentional Omissions (within the scope of the questions)
– Avoid Getting Scared and Pleading the 5th Prematurely
In all reality, you and your Attorney (Never go to an IRS Audit when you know you committed a Tax Crime without counsel) may be the only ones who know about the crime (Read: Poker Face).
You need an Attorney, because you need to be able to rely on the confidentiality of the Attorney-Client Privilege.
Reverse Eggshell Audits
These are even worse. They are probably not even legal, but they happen. The IRS agent Knows or is Pretty Sure you committed a Tax Crime. With that said, the IRS Agent dances around the issues in order to collect as much financial and other background as he or she can, couching it in the fact that it is required to support a civil audit case against you — when in all reality, the Agent/Examiner is mounting a criminal case against you.
This is nearly always illegal. Why? Because if you are ever in a Civil Audit and Auditor/Examiner suspects Tax Fraud or another Tax Crime, he or she must immediately cease the audit. You have the absolute right against self-incrimination and it is illegal to couch a criminal investigation in a civil audit.
The Problem: It may be hard to prove it was Criminal Investigation couched as a Civil Audit.
Worse Yet, Offshore/Foreign Tax Fraud Matters
At Golding & Golding, we focus exclusively in International, foreign & offshore tax matters. In recent years, the IRS has made offshore penalty enforcement a key priority. In recent years, the international focus has been on:
- International Cryptocurrency Reporting and Transactions
- Foreign Accounts
- Foreign Assets
- Foreign Investments
- Foreign Income
The penalties for fraudulently being out of compliance for offshore/foreign related matters can be severe (see below). If you have knowingly or willfully (or with reckless disregard) either filed a false tax return intentionally did not file a return, you should consider contacting an experienced OVDP Attorney or IRS Voluntary Disclosure Lawyer to get into compliance.
Golding & Golding, A PLC
We have successfully represented clients in more than 1,000 streamlined and voluntary disclosure submissions nationwide and in over 70-different countries.
We are the “go-to” firm for other Attorneys, CPAs, Enrolled Agents, Accountants, and Financial Professionals across the globe.
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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.