Common Allegations Resulting from IRS Criminal Tax Audits: What Maryland Taxpayers Need to Know

While IRS audits often result in civil liability, they can also lead to criminal charges in some cases. When facing an IRS criminal tax audit, understanding the charges that are on the table is a key first step toward executing an informed defense strategy. Learn more from US International Tax Advisors.

7 Common Criminal Charges Against Individual and Corporate Taxpayers

Criminal tax audits can lead to a wide range of charges under the Internal Revenue Code and other federal laws—and these charges can present substantial risks for both individual and corporate taxpayers. Some of the most common criminal charges stemming from criminal tax audits include:

• Underreporting Taxable Income – While inadvertently underreporting taxable income can lead to civil liability for back taxes, interest and penalties, willfully underreporting taxable income is a criminal offense under the Internal Revenue Code.
• Underpaying Taxable Income – Along with willfully underreporting taxable income, willfully underpaying taxable income is a criminal offense as well. Frequently, taxpayers targeted in criminal tax audits will end up facing multiple charges for multiple offenses.
• Claiming Fraudulent Tax Deductions – Claiming fraudulent tax deductions is a common violation of the Internal Revenue Code that can also lead to criminal prosecution. This includes fraudulently claiming the home office deduction, fraudulently claiming personal travel as a business expense and other similar types of violations.
• Failing to File a Federal Tax Return – Willfully failing to file a federal tax return can also lead to criminal charges under the Internal Revenue Code. This applies not only to income tax returns, but also employment tax returns, estate and gift tax returns, and information returns.
• Employment Tax Violations – Employers frequently get into trouble with the IRS for committing employment tax violations. Willfully underpaying the employer’s share of employment tax and failing to remit the employee’s share of employment taxes can both lead to criminal charges.
• Offshore Disclosure Violations – Failing to properly disclose offshore bank accounts and other offshore holdings can lead to criminal charges under the Internal Revenue Code and the Bank Secrecy Act.
• Making False Statements to IRS Agents – When facing a criminal tax audit, making false statements to IRS revenue agents during the process can trigger criminal charges regardless of whether the audit leads to other criminal allegations.

These violations (among others) carry fines ranging from five to six figures (up to $500,000 for corporations), and individual taxpayers can face federal incarceration as well. To avoid unnecessary consequences, taxpayers targeted in IRS criminal tax audits must engage experienced defense counsel as soon as possible.

Contact Us to Speak with US International Tax Advisors

Are you (or is your company) facing an IRS criminal tax audit in Maryland? If so, we encourage you to contact us promptly for more information. To discuss your situation with US International Tax Advisors, in confidence, call 844-796-8565 or tell us how we can reach you online now.