Filing a tax return can be one of the most stressful tasks that people face all year. That complicated maze of forms, deductions, withholding it just never gets any easier.

Sometimes, even with the best of intentions, mistakes can be made. Alternatively, especially in this rough economy, it can be tempting to fudge your numbers just a little. Here is what can happen if you’re caught in one of these two scenarios.

Well, the take-home point is that the dividing line between these situations is the dividing line used by tax fraud investigators and prosecutors when they make their decisions on when to press charges. By the legal definition, tax fraud is an intentional crime. In other words, an unintended misrepresentation on your return is not illegal if it was really an honest mistake.

What Should You Do If Under Tax Fraud Investigation

In a variety of different tax matters, real mistakes can unfortunately look like willful fraud to investigators. If you are facing an investigation or charges even though you filed your information as honestly as you could, you need to retain an attorney who can assert your rights and ensure that you are not convicted of a crime you did not commit.

For those of you who did happen to sweeten the numbers in your favor, it’s also crucial that you retain an attorney right away. Often, a legal professional will be able to negotiate with the prosecutors and thereby have your penalties significantly decreased.

If you are contacted by investigators, you would be well advised to seek legal counsel before responding to any of their questions or demands. You don’t want to say anything that could make your situation worse than necessary, so leave the communication to your attorney, the expert.

Possible Penalties for Tax Crimes

For intentional tax fraud, the possible penalties include expensive fines and even time behind bars.

United States Code, Title 26, Section 7206 is the law that sets out the specific penalties for tax fraud. They are as follows: fines up to $250,000 for individuals or up to $500,000 for corporations, and imprisonment for up to three years.

As a final kick after you’re down, the law adds that charges associated with prosecution can be taken out of your pocket.

The statute of limitations on most tax fraud crimes is either three or six years from the date your return should have been filed or the date your payment was due. Prosecutors can secure an additional nine months after filing a criminal complaint against you. Still, if your tax fraud offense was in the distant past, you will probably not face charges.

In conclusion, tax crime penalties are severe and should be taken seriously. Although unintentional mistakes should not lead to convictions, they can often leave you vulnerable to prosecution at the very least. Contact a professional defense attorney in any situation where you may be facing charges, but do your best to make sure your taxes are right from the start.

If you need help with a criminal tax law issue in New York, consult our NYC tax fraud defense lawyers at (212) 577 6677 as soon as possible.