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Defending Tax Fraud Claims

Tax fraud reportedly costs the United States more than $300 million each year. For this reason, the Internal Revenue Service (IRS) works to identify and prevent incidents of fraudulent behavior. However, in their efforts to collect money that is rightfully owed to the government, agents sometimes pursue the wrong suspects, leaving innocent citizens to defend themselves against one of the largest agencies within the federal government. The potential penalties associated with a tax fraud conviction are extensive, so these charges should be taken seriously and dealt with as quickly as possible.

When investigating individual citizens, the IRS makes various types of fraud allegations, including:

  • Not reporting all sources of income;
  • Intentionally working in cash in order to avoid tax liability;
  • Destroying records or lying during an audit;
  • Hiding income in offshore accounts;
  • Keeping two sets of accounting books;
  • Using fake Social Security numbers;
  • Filing under a stolen identity; and
  • Claiming false dependents.

According to a report byReuters, the state of Florida ranks at the top of the list for fraudulently claimed refunds. In response to the growing problem, an Identity Theft Task Force was formed in August 2012 to conduct investigations in South Florida. Since that time, about 300 people have reportedly faced charges, totaling more than $450 million in attempted payouts and more than $100 million is actual refund payments.

One case involved a Davie man who filed fraudulent refunds for more than $22 million using stolen identities, as well as some belonging to willing participants. He is reportedly facing a possible prison sentence of more than 22 years. Another suspect was recently convicted and sentenced to five years in prison for cashing stolen refund checks that totaled about $5 million. The IRS alleges that these scams involve the theft of identities to file false tax returns fraudulently. The accused parties are then able to collect the refund money prior to the IRS or victim realizing the problem.

Tax Preparer Fraud

Individual taxpayers are not the only targets of the IRS; professional tax preparers are also facing allegations and increased scrutiny. A recent report in the Accounting Today Newsletter discusses the two Florida tax preparers who are facing the permanent loss of their abilities to file taxes. In the first instances, the IRS allegedly found discrepancies in 74 of 76 tax returns prepared by the accused. The complaint alleges that the accused utilized fictitious business deductions and false education credits to claim earned income credit refunds. In the second instance, the defendant is accused of exaggerating deductions and claiming false child care credits. His alleged actions reportedly amount to millions of dollars in losses.

Tax fraud is a federal offense and a conviction can result in incarceration in federal prison. Whether you are a taxpayer or a tax preparer, it is vitally important to secure legal representation at the first hint of a tax fraud investigation. An experienced attorney can assist you throughout the investigation process to ensure that your rights and interests are protected.

If you or a loved one is facing tax fraud charges, contact the capable attorneys of Ratzan & Faccidomo, LLC in Miami today at (305) 330-3905 for a confidential and free consultation.

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