Texas Tax Fraud Lawyer Brown, PC: Protecting Your Assets and Reputation
Each and every document that a person submits to the IRS may fall under scrutiny. A misstatement on a return, statement or other document could be classified as false and trigger an investigation. At best, the taxpayer must sacrifice time and money to cooperate with the IRS’s inquiries. At worst, the government may file fraud charges.
Brown, PC can assist taxpayers at the earliest stages to keep charges from being filed in the first place. If the government prosecutes the taxpayer, our law firm can build a strong defense that protects our client’s assets, financial security and freedom. Our firm has exclusively handled tax disputes and white collar criminal defense for 25 years. We have the experience, resources and innovative strategies to take on the highest profile tax fraud investigations and prosecutions.
Our clients comprise Fortune 500 companies and well-known individuals in the world of entertainment, sports and business. They tend to be high profile and high income with complicated financial portfolios, the exact taxpayer profile most likely to be targeted by an IRS investigation. Our busy clients do not generally do their own taxes and instead rely upon third party accountants, auditors and other tax professionals. Ultimately, however, liability is attributed to both the taxpayer and tax professional for mistakes or false statements made on the documents submitted to the IRS. For this reason, our Texas tax fraud lawyers suggest that any person or entity that is questioned about a document retain experienced counsel before acting or responding.
Penalties Under § 7207
Willfully submitting a fraudulent return, statement or other document to the IRS is a misdemeanor. An individual taxpayer is subject to a jail sentence of up to one year and fines of up to $100,000. A corporate taxpayer is subject to up to $200,000 in fines. The sentence may also include retribution for double the gross gain to the taxpayer or double the gross loss to another party resulting from the taxpayer’s false statement.
Section 7207 misdemeanor charges are generally reserved for isolated incidents or in cases in which the taxpayer cooperated fully with the IRS or confessed immediately when the IRS questioned the veracity of the document. The government also considers mitigating factors, including the assistance of a lower-level participant in the prosecution of another person responsible for a broader tax fraud scheme. Otherwise, the government is likely to pursue felony fraud charges if the taxpayer submitted the false document in furtherance of a plan to deceive the IRS.
If appropriate, our firm negotiates reduction of a felony fraud charge to a misdemeanor to minimize the sentence imposed upon our client. However, if the government’s evidence does not meet the high standard of proof, we demand dropped charges or acquittal at trial.
Elements of Fraudulent Returns, Statements or Other Documents
The government must prove a 26 U.S.C. § 7207 violation beyond a reasonable doubt. The three elements of the offense are:
- The taxpayer or preparer submitted to the IRS a tax return, statement or another document.
- That return, statement or document was false with respect to a material matter.
- The taxpayer or preparer acted willfully.
What is a “Document” under § 7207?
A document under § 7207 includes lists, returns, accounts, statements or other documents. However, the section applies to virtually any document without limit as to type. The government generally does not pursue § 7207 charges for filing a false tax return, but may instead pursue the taxpayer or preparer under other provisions.
The taxpayer may be liable for a false statement made on a document prepared by another person if the taxpayer delivered or disclosed the document to the IRS. This holds true even if the taxpayer did not sign the document, but merely submitted it to the IRS knowing the document contained a false statement of a material matter. Common scenarios involve an IRS audit in which the auditor submits cancelled checks, invoices or receipts that have been altered to reflect an overstated amount of deductions.
What is a False or Fraudulent Material Matter?
A false material statement is an element in several criminal tax code violations, including § 7207 charges that involve IRS fraud. First, the document must contain a false or fraudulent statement. Second, the falsity must be about a material matter. However, materiality is not based upon whether the taxpayer’s taxes are affected by the statement and, in fact, could apply to statements that do not reduce tax liability. This gives the government discretion to classify practically any information as material, a point that our attorney vehemently argues against.
What Does Willful Mean in the Criminal Tax Code?
The taxpayer is only criminally liable for willful conduct. In other words, an error or negligence does not subject the taxpayer to criminal liability, although perhaps civil liability. Willful generally means a “voluntary, intentional violation of a known legal duty.”
Short of an admission of wrongdoing, rarely does direct evidence of willfulness exist. The government typically proves taxpayer intent through circumstantial evidence. Like putting a jigsaw puzzle together, the government attempts to demonstrate the taxpayer’s state of mind by connecting several incomplete pieces to form a bigger picture. Texas tax fraud attorneys are skilled at undermining each piece of evidence to raise reasonable doubt as to the willfulness of the taxpayer’s actions.
Common Federal Tax Fraud Allegations
Tax fraud allegations can take many different forms. If you are facing scrutiny from the IRS, it will be critical to ensure that you have a clear understanding of why the agency has initiated an audit or investigation. Different types of tax fraud allegations require different types of defense strategies, and you also need to ensure that your defense strategy takes into account all pertinent facts and circumstances. A Texas tax fraud lawyer at Brown PC can help, but it is imperative that you contact us as soon as possible.
We defend high-income and high-net-worth taxpayers against all types of federal tax fraud allegations. This includes common allegations such as:
- Underreporting federal tax liability
- Underpaying federal tax liability
- Failing to disclose offshore accounts and other foreign financial assets
- Using abusive tax shelters and other unlawful tax avoidance schemes
- Conspiring with tax professionals and others to commit federal tax fraud
Regardless of the allegations you are facing (or that you believe you may be facing), if you are a high-income or high-net-worth taxpayer and you need help dealing with the IRS, we strongly encourage you to contact us to see what we can do to help. We have a long track record of success in high-stakes federal tax fraud cases, and we can use our experience to your advantage.
The IRS’s Enforcement Process in Tax Fraud Cases
Along with understanding the allegations against you, it is also important to ensure that you have an accurate understanding of the IRS’s enforcement process in tax fraud cases. Broadly, IRS enforcement actions begin with either:
- IRS Audit – The IRS routinely audits high-income and high-net-worth taxpayers. Audits can target all types of tax law violations, including violations of the Internal Revenue Code, Bank Secrecy Act, Foreign Account Tax Compliance Act and other federal statutes.
- IRS CI Investigation – IRS Criminal Investigations (IRS CI) investigates high-income and high-net-worth taxpayers suspected of willfully violating federal law. When an investigation uncovers sufficient evidence to substantiate charges, IRS CI works with the U.S. Department of Justice (DOJ) to pursue criminal prosecution.
While IRS audits are civil in nature, both audits and investigations can lead to criminal charges if the IRS uncovers evidence of willful tax fraud. As a result, when criminal charges are a concern, the same strategic and forward-thinking approach is required, and targeted taxpayers must work closely with a highly experienced Texas tax fraud lawyer to ensure that they are not putting themselves at risk unnecessarily.
About Our Texas Tax Fraud Lawyers
Each Texas tax fraud lawyer at Brown PC has extensive experience representing taxpayers in high-stakes federal criminal cases. We focus our practice specifically on representing high-income and high-net-worth taxpayers, as well as tax professionals and select other individuals and organizations. Our team is led by founder Lawrence Brown, who has well over 25 years’ experience successfully representing billionaires, professional athletes, corporate executives, and other prominent clients.
How We Can Help
So, how can we help you? The steps we will take to protect you depend on whether you have concerns about facing federal tax fraud allegations or you are currently facing scrutiny from the IRS (or IRS CI):
If You Have Concerns About Facing Federal Tax Fraud Allegations
If you have concerns about facing federal tax fraud allegations, we can help you target a favorable resolution before the IRS opens an audit or investigation. There are a variety of potential options available, including voluntary disclosure, and we can help ensure that you are targeting the best option based on your specific circumstances. If warranted, we can also negotiate with the IRS on your behalf to secure a tax settlement that minimizes the amount you owe while protecting you against the risk of facing criminal tax fraud charges.
If You Are Facing Federal Tax Fraud Allegations from the IRS (or IRS CI)
If you are facing federal tax fraud allegations in an IRS audit or an IRS CI investigation, then a very different approach is required. At this stage, you are no longer eligible to submit a voluntary disclosure, and you must confront the IRS’s inquiry head on. At Brown PC, we have substantial experience protecting high-income and high-net-worth taxpayers who are at risk of facing criminal charges, and we will rely on this experience to develop a defense strategy that is focused on protecting you as efficiently and quietly as possible. While there are no guarantees, we are frequently successful in terminating our clients’ criminal tax fraud investigations without further enforcement action.
Consult with a Texas Tax Fraud Lawyer if Facing a Tax Fraud Investigation or Prosecution
A misstatement on a document filed with the IRS can give rise to a tax fraud investigation. Do not delay in retaining aggressive defense counsel to protect your financial interests, future and freedom. The Texas tax fraud lawyers at Brown, PC will fight aggressively on your behalf.