Civil Tax Fraud Litigation

The IRS can impose the civil fraud penalty on you if it determines that any part of an underpayment of tax that’s required to be shown on your return was due to fraud.  The penalty is 75 percent of the portion of the underpayment that it determined was due to fraud.  For example, if you reported on your income tax return that you owe tax of $5, and the IRS audits your return and determines that you underreported your tax by $5; in other words, you really owe $10, and that the underreported $5 was due to civil fraud, the civil fraud penalty it will impose, in this case, will be $3.75 (or 75% of the underreported $5).  Thus, instead of the $5 you thought you owed, according to the IRS, you owe $13.75 ($10 due to tax and $3.75 due to civil fraud penalty).   A 175% increment from what you thought you owed.  While evidence of such fraud is generally circumstantial, the IRS and the courts will infer the fraud from certain conducts that a taxpayer exhibits in handling his or her financial affairs.

If you’re facing a civil tax fraud situation, don’t take on the IRS without the assistance of an experienced and knowledgeable tax attorney that knows how the IRS works, and will vigorously represent your interests before the IRS, the other taxing authorities, or the courts.  If the IRS or any of the taxing authorities contacts you about starting an audit of you or your business, or if you’re already under audit, don’t hesitate to contact or call us at (770) 962-7201.  Your initial consultation is free.