New York City Tax Fraud Attorney
Being accused of tax evasion or a tax offense is daunting. New York criminal defense attorneys and tax fraud lawyers with Norman Spencer Law Group PC have built a solid track record of successfully defending individual and corporate clients in state and federal criminal tax investigations, criminal offenses, and criminal prosecution.
We are NYC’s leading New York tax fraud attorney and criminal lawyer. Working closely with the nation’s leading forensic accounting specialists, we are well-positioned to mount a successful defense for your tax fraud case, criminal tax investigation, or federal tax crimes. As experienced tax attorneys, we have vast experience providing legal representation and defending tax preparers, accountants, attorneys, businesses, and ordinary taxpayers.
What is considered a tax crime?
Tax crimes refer to illegal activities that involve taxes, such as tax evasion, tax fraud, and failure to file a tax return.
Tax evasion occurs when someone intentionally fails to pay their taxes or pays less than what they owe. This can be done through various means, such as hiding income or assets, making false deductions or credits, or failing to report all taxable income.
Tax fraud, on the other hand, involves deliberately providing false or misleading information on a tax return to reduce the amount of tax owed. This can include claiming false deductions or credits, using false exemptions, or failing to report all income.
Criminal tax fraud and crimes are prosecuted on the state and federal levels. Some common tax fraud acts that can result in criminal charges are tax refund fraud, tax preparer fraud, child tax credit fraud, employer tax fraud, family tax relief credit fraud, property tax fraud, sales tax fraud, and corporate/business tax fraud.
Tax Laws Explained
In the State of New York, there are as many as eight categories of tax crimes.
Titles 18 and 26 of the USC provide definitions of these criminal offenses and set related criminal procedures. Conspiracy, false statements, and document falsification are usually prosecuted under Title 18.
Title 26, also known as the Internal Revenue Code, includes a description of taxes and provides that anyone who attempts to evade taxes and pay these liabilities, willful failure to file tax returns or file a fraudulent and false tax return, perpetrates a felony and thus is subject to criminal fines and criminal penalties. For individuals, it is a fine of up to $100,000 US dollars and up to five years in prison, and for businesses, it is a fine of up to $500,000 US dollars, as well as full restitution of unpaid taxes and tax liability. Another offense that is also prosecuted under this statute is a willful violation of aiding in the preparation of a fraudulent tax return.
Apart from these federal statutes, New York State also has its legislation regarding tax laws and related offenses, which provides a classification of tax offenses (from misdemeanors to felonies) and defines penalties for them.
- Tax Law §§ 1801(a)(1): willful failure to file a return or other required document
- Tax Law §§ 1801(a)(2),(3): knowingly making or filing a false return or report or supplying false information
- Tax Law §1801(a)(2): willfully knowing a return, report, or other documents under that chapter contain false or fraudulent information or omit any material information.
- Tax Law §1801(a)(3): knowingly giving false or fraudulent information in connection with any return, audit, investigation, or proceeding or failing to provide information within the time required by law or regulations.
- Tax Law § 1801(a)(4): willfully engaging in a scheme to defraud the State.
- Tax Law §1801(a)(4) supplements §§1801(a)(2) and (a)(3): ascribing tax fraud status to acts that do not involve filing a false document or making a false claim to the authorities that involve elements of fraud and scienter. §1801(a)(4) provides that any person, not only a taxpayer, commits fraud when he knowingly engages in any scheme to defraud the State or a political subdivision.
- Tax Law §§ 1801(a)(5): willfully failing to remit taxes collected on behalf of the State
- Tax Law §§ 1801(a)(6): willfully failing to collect sales, excise, or withholding tax that is required to be collected.
- Tax Law §§ 1801(a)(7): willfully and with an intent to evade any tax, failing to pay a tax due
- Tax Law §§ 1801(a)(8): issuing False Exemption Certificates
Apart from these federal statutes, New York State also has its own legislation regarding taxes and related offenses, which provides a classification of tax offenses (from misdemeanors to felonies) and defines penalties for them.
What Happens During a Criminal Tax Investigation?
Criminal investigations into alleged New York state tax fraud offenses are conducted by the Internal Revenue Service (IRS) Criminal Investigation Division. The NYS Department of Taxation and Finance conducts state-level investigations in New York. Sometimes both agencies can work together on a single case.
IRS agents frequently review tax return information and conduct civil tax audits. If in the course of such tax audits, some discrepancies are found, the case is referred to the Criminal Investigation Division, which starts a criminal investigation.
The target of the investigators may be unaware of it for a long time while the agents are sifting through the person’s tax records and tax information and collecting data about their income from several sources. Then the person will receive a letter from the IRS or an IRS Administrative Summons or be approached directly by its special agents.
The agents will ask the person various questions and are asked to provide some documents, which are intended to serve as proof of whatever evidence they already have collected. Soon after that, the investigation is likely to end – either concluded for good or recommended for a criminal prosecution, such as for a tax evasion charge passed to the Department of Justice, which will later give it to the local US Attorney’s office for indictment.
What Should You Do if Investigated by the IRS?
No matter at which stage you find out you are being targeted, it is crucial not to engage in conversations with the investigators, not to destroy or alter any files, and start searching for legal counsel from competent tax evasion and tax fraud lawyer soon as possible.
We have gained vast expertise in communicating with government bodies such as the IRS, the DOJ, and others. By engaging experienced forensic accountants, hard money lenders, and our tax fraud lawyers, we may be able to dismiss the tax fraud case early in the investigative process, or if we intervene later, communicate with the US Attorney and convince passing the tax fraud case back to the Department of Justice for a non-criminal resolution with civil penalties.
And even if the criminal tax fraud case or tax evasion cases reach trial and appeal, we may still be able to negotiate a favorable plea and minimize criminal penalties and hefty fines.
READ MORE: The Best Defense for an IRS Investigation
HOW TO CHOOSE THE BEST NEW YORK TAX FRAUD ATTORNEY
If you are in a situation similar to the one described above, you need the help of a competent IRS New York tax fraud lawyer. When looking for a fraud lawyer or criminal lawyer to entrust your tax fraud case, too, there is no substitute for experience.
When you are under a criminal tax fraud investigation, there is no substitute for experience. We encourage you to investigate the background and experience of the prospective fraud lawyer, and don’t be afraid to ask direct questions about handling similar tax fraud and tax liability cases in the past.
You can rest assured that at Norman Spencer Law Group PC, you’ll find the right tax fraud attorney to handle your situation. Our New York tax fraud and evasion defense lawyers are available to meet with you to discuss your tax fraud matter and offer solutions.