Tax Fraud Prosecution

After the (CID) has conducted an investigation and has recommended prosecution to the Justice Department, there are three crimes with which an individual may be charged:

  • Tax evasion: This is an intentional violation of tax laws. It is a broad category, encompassing any cheating of the government in taxes. Tax evasion is a felony and a very serious crime. A conviction for tax evasion can carry with it up to a five-year prison sentence and/or fines up to $100,000.
  • Filing a false return: Prosecution for this crime is appropriate when a taxpayer has provided the government with false or misleading information on the taxpayer’s tax return. In such cases, the government does not have to prove the taxpayer intended to evade tax laws. Rather, it merely must prove that the taxpayer filed a false return. Filing a false return is a felony. Punishment for this crime can consist of up to three years in prison and/or up to $100,000 in fines.
  • Not filing a tax return at all: Failing to file a tax return is the least serious of the three tax crimes. It is a misdemeanor. The consequences for being found guilty is a maximum of 1 year in prison and/or fines totaling up to $25,000 for each year a taxpayer failed to file.

A taxpayer may be arrested once the taxpayer has been charged with one of these three crimes. If so, the taxpayer may be required to post bail or may be released on his or her own recognizance. Once charged, it is imperative that the accused taxpayer retain a tax attorney as soon as possible. The lawyer will need time to study the client’s case and formulate a defense. Taxpayers need to keep in mind that the IRS has already completed their investigation and has most likely built a strong case against the accused taxpayer.


Inside Tax Fraud Prosecution