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Using Fraudulent Offshore Accounts and Companies to Shield Income Carries Heavy Criminal Penalties

Posted on in Criminal Defense

fraudulent offshore accounts, fraudulent offshore companies, San Jose criminal defense attorneys, tax fraud penalties, tax fraudWhile some people look forward to getting a hefty refund at tax time due to deductions and credits, others end up owing money on their income and assets. It is reasonable to look for ways to reduce your tax liability; however, you need to be wary of actions you could take that would be considered tax fraud.

The IRS is on the lookout for people who use fraudulent offshore accounts or companies to shield their income. If you are convicted of these types of white collar criminal charges, you could then face a potential jail sentence as well as heavy tax fines and penalties.

The IRS and Abusive Tax Schemes

The criminal investigation division of the Internal Revenue Service (IRS) is always on the lookout for those who use abusive tax schemes as a way to avoid paying their fair share of taxes on income and earnings. The IRS states that these types of schemes have gotten more common as well as more sophisticated over the years. The means of hiding income was once used primarily among organized crime members and involved storing money in foreign and offshore accounts where it was not easily traced, but not easily accessible either.

Today, financial secrecy laws in some jurisdictions, and the availability of having a debit or credit card linked to the account, make these schemes more effective and appealing to the average person.

While the IRS criminal investigation unit’s primary focus is on promoters of these types of abusive tax schemes and professionals, such as accountants and lawyers who help facilitate them, they are equally aggressive in trying to root out those who invest in them for the purpose of evading taxes. These schemes often involve multiple flow through entities, which are used to conceal the true owner of income or assets.

The following are frequently used in perpetrating these crimes:

  • Limited Liability Companies (LLC) and Partnerships (LLP);
  • International Business Companies (IBC);
  • Foreign trusts;
  • Foreign bank accounts;
  • Foreign issued credit or debit cards.

Penalties for Abusive Tax Schemes

Changes in tax reform and the impact it has on deductions, credits, and tax rates could end up making abusive tax schemes more appealing to certain people and businesses. It is important to be aware that if you are accused of this type of activity, the criminal and civil IRS penalties are severe. They include:

  • Civil penalties: Repayment of the tax owed along with a penalty that amounts to up to 75 percent of the underpayment attributed to tax fraud; and
  • Criminal penalties: Fines up to $250,000 and up to five years in prison for each charge.

Reach Out to Us Today for Help

Allegations of tax fraud are a serious criminal matter and require a strong legal defense from an experienced criminal attorney. Get the professional legal representation you need and call or contact Jachimowicz Law Group to discuss your case with our talented San Jose criminal defense attorneys today.

Sources:

https://www.irs.gov/compliance/criminal-investigation/overview-abusive-tax-schemes

https://www.irs.gov/compliance/criminal-investigation/civil-and-criminal-penalties-abusive-tax-schemes

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