Tax Fraud Lawyer – Tax Evasion Defense

Defending Clients Against Tax Fraud Audits, Investigations and Charges Nationwide

Do you have problems with your tax reporting? Did you find out that you are under investigation? Did Internal Revenue Service (IRS) agents come to your house or place of business? Did you receive a Grand Jury subpoena? Are friends, family members or people that you care about accused of a federal theft offense or facing tax fraud charges? Is it time to get a tax fraud lawyer? If so, this is what you need to know.

The federal government has significantly increased its number of federal white-collar investigations, including investigations focused on federal tax fraud. Almost no day passes without new arrests and new accusations of federal tax fraud. With penalties that can include criminal fines and years in prison, it is essential to obtain reliable legal advice from an experienced federal tax fraud attorney fast to avoid a worst-case scenario.

Oberheiden, P.C. is a group of former U.S. prosecutors and experienced federal defense attorneys. Our tax fraud lawyers can help you deal with the IRS, IRS Criminal Investigation Unit (IRS CI), and the U.S. Department of Justice (DOJ). Many of our attorneys are former DOJ prosecutors that have worked closely with federal law enforcement agencies like the IRS. This experience often proves key when choosing the right strategy to keep our clients out of trouble. Our attorneys have successfully resolved a great number of federal investigations with no criminal charges for our clients. Contact us today for a free and 100% confidential consultation with an experienced tax fraud attorney at Oberheiden P.C.

Are You at Risk for Facing Criminal Tax Fraud Charges?

Paying less than you owe to the IRS is having committed tax fraud, and is a violation of federal law that can lead to civil or criminal penalties. If you are under investigation or facing charges for tax fraud under 26 U.S.C. Section 7201, you need to engage an experienced federal tax fraud defense attorney promptly.

All United States citizens and residents owe reporting obligations to the IRS. Citizens and residents must accurately calculate their federal income tax liability, and they must timely pay their tax owed. U.S. businesses have similar obligations as well, and they must also report and pay taxes like payroll taxes (i.e. Social Security tax) and all other applicable taxes imposed by the Internal Revenue Code. Failure to pay any federal tax when due is a violation of the Internal Revenue Code. Most cases are civil in nature, and the IRS is constantly auditing individual and corporate taxpayers across the country. However, allegations of intentional underpayment or nonpayment are considered tax fraud and can lead to a criminal tax investigation and possibly criminal charges, and the penalties for committing tax fraud are severe.

Federal Tax Fraud Penalties

Both individuals and corporate entities can be penalized for tax fraud. The criminal penalties for tax fraud include large fines, substantial prison terms in federal penitentiaries, and repayment of the government’s costs of prosecution. Civil penalties for tax fraud cases include monetary penalties or fines and repayment of the government’s prosecutorial expenses.

• Tax Evasion: Punishment for tax evasion includes a prison sentence of up to five years, a fine of up to $100,000 for individuals and $500,000 for corporations, and repayment of the costs of prosecution.
• False Statements on Income Tax Returns: Punishment for making false statements on income tax returns includes a prison sentence of up to three years, a fine of up to $100,000 for individuals and $500,000 for corporations, and repayment of the costs of prosecution.
• Aiding or Assisting in Preparation of False Documents Under the Internal Revenue Code: Punishment for assisting in preparation of false tax documents for filing a false tax return includes a prison sentence of up to three years, a fine of up to $100,000 for individuals and $500,000 for corporations, and repayment of the costs of prosecution.
• Conspiracy: Where the object of a conspiracy is a felony, as is the case for federal tax crimes, the punishment is up to five years in prison and/or criminal fines. A person found guilty of conspiracy to commit a tax crime may face additional penalties for the underlying tax crime that was the object of the conspiracy.

Are You Under Investigation by the IRS for Federal Tax Fraud?

Criminal tax fraud investigations are handled by IRS CI. Within the federal law enforcement system, IRS CI’s role is to, “serve[] the American public by investigating potential criminal violations of the Internal Revenue Code and related financial crimes in a manner that fosters confidence in the tax system and compliance with the law.”

While IRS CI investigates a multitude of criminal offenses under the Internal Revenue Code and other tax law federal statutes, one of its primary enforcement priorities is tax fraud under 26 U.S.C. Section 7201:

“Any person who willfully attempts in any manner to evade or defeat any tax imposed by this title or the payment thereof shall, in addition to other penalties provided by law, be guilty of a felony and, upon conviction thereof, shall be fined not more than $100,000 ($500,000 in the case of a corporation), or imprisoned not more than 5 years, or both, together with the costs of prosecution.”

What does it mean to “evade or defeat” a federal tax? In essence, it means paying less than you owe or avoid paying taxes. If you are under investigation for federal tax fraud, your tax fraud lawyer will need to review your federal tax filings and your personal or business financial records in detail to determine whether your federal tax obligations have been satisfied. If it can be shown that you have paid what you owe, then this should effectively end the inquiry. However, if you have underpaid, then you will need to be able to show that your underpayment was not “willful” in order to avoid criminal culpability.

What does it mean to “willfully” attempt to evade or defeat a federal tax? Government Proposed Jury Instruction Number 26.7201-5 highlights a key aspect of the federal crime of tax fraud. It states, in part:

“A person may not be convicted of federal tax [fraud] on the basis of a willful omission alone; he/she also must have undertaken an affirmative act of evasion. . . . [Defendant] acted ‘willfully’ if the law imposed a duty on him/her, he/she knew of the duty, and he/she voluntarily and intentionally violated that duty. . . . This is a subjective standard: what did [defendant] honestly believe, not what a reasonable person should have believed. Negligence, even gross negligence, is not enough to meet the ‘willful’ requirement.”

Examples of affirmative acts that federal prosecutors can use to pursue charges for criminal tax fraud include:

• Filing a false or fraudulent return that substantially understates taxable income
• Keeping two sets of books
• Creating false entries, invoices, or documents
• Not keeping books or records
• Destroying books or records
• Concealing assets
• Covering up sources of income
• “[O]ther conduct whose likely effect would be to mislead the Internal Revenue Service or conceal income”

If you underpaid your federal taxes but you did not do so willfully, then you are not guilty of criminal tax fraud. However, you could still be liable for a civil tax fraud penalty (in addition to payment of the full tax you owe). As a result, when facing a federal investigation for tax fraud under 26 U.S.C. Section 7201, you need to approach your defense strategically, with your priorities being: (i) to avoid any liability at all if possible; and, (ii) if you cannot avoid liability entirely, to ensure that your case is handled civilly rather than criminally.

Put our highly experienced team on your side

Dr. Nick Oberheiden

Founder

Attorney-at-Law

Lynette S. Byrd

Former Department of Justice

Brian J. Kuester

Former U.S. Attorney
Former DA

John W. Sellers

Former Senior Trial Attorney
U.S. Department of Justice

Local Counsel

Joanne Fine DeLena

Former Assistant U.S. Attorney

Local Counsel

Joe Brown

Former U.S. Attorney & Former District Attorney

Local Trial & Defense Counsel

Amanda Marshall

Former U.S. Attorney

Local Counsel

Aaron L. Wiley

Former Federal Prosecutor

Local Counsel

Roger Bach

Former Special Agent (OIG)

Michael Koslow

Former Supervisory Special Agent (FBI)

Chris Quick

Former Special Agent (FBI & IRS-CI)

Ray Yuen

Former Supervisory Special Agent (FBI)

Have You Been Charged with Federal Tax Fraud?

If you have already been charged with criminal tax fraud, you will need to focus your defense on the specific allegations at hand. At this point, you are likely facing up to five years in prison and a $100,000 fine as an individual (plus liability for taxes and interest); or, if your company has been charged, it is facing a maximum fine of $500,000 (plus liability for taxes and interest).

There are several potential strategies for defending against federal tax fraud allegations. However, determining which strategies are viable in any particular case requires a thorough assessment of the factual and legal circumstances at hand. With this in mind, some examples of potential defenses to tax fraud include:

1. Inadequate Evidence of Underpayment or Non-Payment of Federal Tax

In order to prove a charge for tax fraud under 26 U.S.C. Section 7201, federal prosecutors must first prove that you under-reported your federal tax liability. If there is not sufficient evidence to prove that you submitted a false or fraudulent return (regardless of whether or not you actually submitted a false or fraudulent return), then the government cannot prove its case against you.

2. Inadequate Evidence of a Willful Attempt to Evade or Defeat Tax

The government must also be able to prove that you made a “willful” attempt to evade or defeat tax. If federal prosecutors do not have the evidence required to convince the jury that you intended to avoid tax liability and knowingly filed a false or fraudulent return, then you cannot be convicted of criminal tax fraud even if you paid less than you owed.

3. Inadequate Evidence of an Affirmative Act in Furtherance of the Attempt

Likewise, proving guilt for criminal tax fraud requires evidence that you undertook an affirmative act in furtherance of your attempt to underpay the IRS. Once again, the burden of proof rests with the DOJ, and if the DOJ’s attorneys do not have the evidence to prove an affirmative act, then they should not be able to secure a conviction in federal district court.

4. Good-Faith Belief in the Accuracy of the Tax Liability Reported and Paid

If you had a good-faith belief that your returns complied with the Internal Revenue Code, then federal prosecutors cannot prove that you acted willfully in attempting to avoid federal tax liability. Even if your belief was unreasonable, if you truly believed that you were submitting an accurate return, then you did not commit criminal tax fraud under 26 U.S.C. Section 7201.

5. Constitutional Violations Resulting in the Inadmissibility of Evidence

How did the federal government secure its evidence against you? Did federal agents raid your home or office? Did they seize your computer or phone? Did they question you or your employees? While there are numerous ways that federal agents can lawfully collect evidence during a criminal tax fraud investigation, there are also numerous miscues that can lead to evidence being deemed constitutionally inadmissible in court.

Federal Tax Fraud Crimes Defined

Tax Evasion [26 U.S.C. § 7201]: A person commits “tax evasion” by knowingly and willfully under-reporting his income on his tax return with the intent of evading payment of taxes to the government. Tax evasion requires an affirmative act; merely failing to file a tax return does not amount to tax evasion, even if the failure to file was willful. In the context of Section 7201, a person acts “willfully” where he voluntarily and intentionally violates a known legal duty. Thus, in the context of tax evasion, individuals who did not fulfill their tax obligations because they believed they did not owe any money to the government would not be committing tax evasion, regardless of whether their belief was reasonable.

False Statements on Income Tax Returns [26 U.S.C. § 7206(1)]: A person may be guilty of making “false statements on income tax returns” if that person knowingly and willfully signs and submits a tax return that contains material false statements with the intent to violate a known legal duty. A false statement is considered “material” if it is capable of influencing an IRS audit, investigation, or verification of income. The term “false statement” includes material omissions from an income tax return. Since Section 7206(1) requires evidence that a person acted knowingly and willfully, if a person includes false statements or omissions on a tax return as a result of that person’s mistaken beliefs or misunderstandings, that person would not be criminally liable for making false statements on an income tax return. Similarly, if the false statements are the result of the person’s reliance on a tax preparer, that person may have a defense to the crime of making false statements on a tax return.

Aiding or Assisting in Preparation of False Documents Under Internal Revenue Laws [26 U.S.C. § 7206(2)]: A person may be guilty of “aiding or assisting in preparation of false documents under the Internal Revenue Laws” if that person knowingly and willfully assisted in the preparation of a tax return that contained material false statements with the intent to violate a known legal duty. Importantly, the knowledge or consent of the person whose taxes are prepared is irrelevant to commission of this crime.

Conspiracy [18 U.S.C. § 371]: A person may be guilty of conspiracy if he or she willfully agrees with at least one other person to commit a crime and at least one overt act is taken in furtherance of the conspiracy by that person or one of that person’s co-conspirators. A “conspiracy” is created when two or more individuals agree to work together to in pursuit of an unlawful goal. To be involved in a federal tax fraud conspiracy, a person must be aware of the unlawful nature of the scheme; merely acting in a way that incidentally advances some element of the crime does not render someone a conspirator. Nonetheless, the person need not be aware of all of the details of the tax fraud scheme, the identities of all other co-conspirators, or all of the plans or actions of the co-conspirators to join the conspiracy. No formal agreement need exist or be acknowledged by the co-conspirators.

How to Choose a Federal Tax Fraud Lawyer

Why Do Clients Choose Oberheiden P.C. for Their Federal Tax Fraud Attorney?

At Oberheiden P.C., we represent individuals and companies nationwide in federal tax fraud investigations, grand jury proceedings, and trials. If you are under investigation or facing charges for federal tax fraud, here are five reasons to choose the tax fraud attorneys at Oberheiden P.C.:

• We are a federal defense law firm. Our practice is devoted to representing clients in federal matters, including criminal tax fraud cases.
• We are former federal prosecutors and agents. Several of our attorneys and defense consultants are former DOJ attorneys and investigators with the IRS and other agencies.
• We have handled thousands of federal matters from both sides. Collectively, our attorneys and defense consultants have handled thousands of federal investigations, grand jury proceedings, and trials from both sides.
• We do not employ paralegals or junior associates. Unlike other law firms, we do not employ paralegals or junior associates.
• We have over 2,000 wins in federal white-collar cases. Our federal white collar criminal defense attorneys have a high success rate helping clients avoid convictions and sentencing in federal tax fraud and other white-collar cases.

Contact Our Tax Fraud Attorneys Today for a Confidential Case Assessment

If you are under investigation by IRS CI or facing federal charges for tax fraud, we encourage you to contact us immediately. To speak with one of our former federal prosecutors in confidence right away, call 888-680-1745 or request a free and confidential case assessment online now.

Additional Pages for Tax Fraud Defense

• IRS Audit Attorneys
• Tax Debt Lawyer

Last Updated: 2023-11-04