Any Taxpayer Can Face Tax Problems with the IRS, Even a Tax Judge

This past week, news hit the airwaves about a former U.S. Tax Court judge who pleaded guilty to violation of federal tax law. This dramatic story speaks to every taxpayer with the message that anyone of any stature or with any level of education can potentially face criminal tax charges.

It also illustrates the importance of anyone who faces the IRS in a criminal or civil charge of not complying with tax laws getting experienced and aggressive legal representation as early as possible. A criminal defense lawyer specifically with tax experience can negotiate with the IRS and federal prosecutors for resolution of the dispute outside of court if possible. Such matters can often be settled well short of a criminal trial, but if necessary, an attorney can launch a vigorous defense of the taxpayer in court.

Turning to the story of the tax judge, the Star Tribune reports that she pleaded guilty to conspiring with her then-husband to commit tax fraud. The charges included allegations of understating income and taxes owed on their tax returns, taking questionable business expense deductions and failing to report taxable gain on a real estate transaction. The ex-husband also reportedly entered a guilty plea.

Last month, we posted a blog about the potential ramifications of a tax fraud, evasion or underpayment charge, depending on whether civil or criminal. In addition to the risk of penalties, interest, fines, prison and other consequences, collateral damage may include immigration problems, job loss, damage to professional and personal reputation, personal financial problems that could include bankruptcy, revocation of professional licenses and more.

Allegations of tax fraud or evasion can actually fall under many different provisions of the U.S. Tax Code. However, a taxpayer under scrutiny by the IRS may not have had the necessary intention or willfulness to commit the act or crime charged. Instead, the taxpayer may have been negligent or the particular interpretation of tax law that led to a disputed return may have been an arguably valid interpretation of a gray area of law, or even just a mistake or error.

Sometimes, the taxpayer may have relied on the professional advice of a tax preparer in taking the disputed action.

Do not face the IRS alone. Talk to a tax lawyer today if facing audit or investigation, or even charges.