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Tax Schemes That Could Result in Criminal Charges

Posted on in Criminal Defense

tax fraud charges, San Jose tax fraud attorneys, tax schemes, foreign trust schemes, avoiding taxesThe hustle to get your taxes filed on time and to claim the maximum amount of deductions may be a distant memory, when suddenly you receive a notice from the IRS in the mail. An audit or investigation may have been opened in your case, or they may simply be requesting some further information. In either event, the prospect of tax fraud charges is a frightening one, with the potential for serious criminal penalties as well as fines and seizures or liens on property. If you have received this type of notice, the following outlines common reasons for investigations and the steps to take to protect yourself.

Tax Schemes the IRS is Looking For

If you are self-employed, own your own business, or are in a high tax bracket, there are a number of actions you can take throughout the year to help reduce your tax burden. Unfortunately, not all of these are legal and among the ones that are, they can easily be abused. The Internal Revenue Service (IRS) is always on the alert for certain types of schemes, and while it may take several months or even years, they will eventually launch an investigation.

If you have received a notice about your previously filed taxes, it may be due to one of the following:

  • Foreign trust schemes, in which all or part of your business assets are held overseas, with no filing requirements;
  • International Business Corporations (IBC), which allow you to operate in the U.S., while avoiding taxes;
  • Overseas accounts, which allow you to hide some of your income or assets from the IRS;
  • False billing schemes, which allow you to take additional tax credits; or
  • Overstating business expenses, which reduces your overall income and tax debt.

While all of these may be presented as a smart strategy for avoiding having the IRS take up too much of your profits, they can land you in hot water. Eventually the IRS is likely to send you a notice, questioning you about these transactions.

What to Do if You Receive a Notice from the IRS

Most of us are familiar with stories of those who get into trouble with the IRS, and how ruinous it can be to your business and overall financial situation. Regardless of your fear, it is important to deal with the situation immediately, as putting it off or ignoring correspondence will only make matters worse. Follow these IRS guidelines on what to do if you are contacted:

  • Read the notice closely, paying attention to any instructions provided;
  • Send any information requested, such as copies of past year returns;
  • Keep copies of your correspondence; and
  • Do not make any statements about your case without talking to an attorney first.

Before taking actions which could jeopardize your rights or land you in deeper hot water, reach out and contact Jachimowicz Law Group. We can arrange a consultation to speak with our dedicated San Jose tax fraud attorneys to discuss the best course of action to protect your rights in the situation.

Sources:

https://www.irs.gov/compliance/criminal-investigation/what-are-some-of-the-most-common-abusive-tax-schemes

https://www.irs.gov/newsroom/if-you-receive-an-irs-notice-heres-what-to-do

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