How to Defend Claims of Criminal Tax Fraud in Arizona

criminal tax fraudInvestigations into tax fraud may lead to charges being sought at either the state or federal level, depending on severity and amount allegedly in question. Should an individual find themselves under California or IRS investigation, it’s important to know what laws and rights apply to their situation.

Not all tax evasions, frauds or similar federal crimes are purposeful; mistakes can happen, identities can be stolen and used against innocent people and, in rarer cases, IRS workers could be complicit to tax fraud without the knowledge of the filer.

Here’s what you should know, and do, if under investigation for tax fraud.

Evading vs. Avoiding

There’s an obvious yet “fine” line between avoiding income taxes, and completely evading tax laws. One is actually legal under most circumstances, while the other isn’t.

Minimizing tax liability through legitimate deductions is commonplace. Not filing tax returns when the federal minimum isn’t met is also well within a U.S. citizen’s rights. These actions, along with filing extensions or payment plans, are what make America great.

Evading tax liability by not filing returns, claiming residency in states one doesn’t reside, and making false claims or statements are methods used to evade taxes, which is both a California Penal Code and IRS crime.

Penalties for tax fraud

Arizona Revised Statutes (A.R.S.) 42-1127 state the mere act of providing false or fraudulent information on tax paperwork is punishable by imprisonment in ADC for up to five (5) years, along with fines at or less than two hundred fifty thousand dollars ($250,000), or in some cases both the fine and imprisonment will be assessed.

Failing to file a tax return could result in misdemeanor charges which could jail the taxpayer for one (1) year, with up two one hundred thousand ($100,000) in fines and fees.

It becomes a federal charge in several scenarios. First, if the intention was to defraud the government out of money, one could receive stiff fines and federal prison time. Secondly, an individual could face an array of wire fraud, embezzlement and theft charges if they work in government and alter, deface or attempt to benefit from fraudulent tax documents.

Defenses to tax fraud

To prove tax fraud, state and federal prosecutors must furnish information that:

  • The defendant knowingly and willingly provided false information to circumvent the IRS tax system, including understating income to lessen liability;
  • The filer knowingly or willingly used an altered social security number to evade liability;
  • The filer intentionally concealed assets to avoid being audited or paying their fair share of taxes;
  • The statement or return was purposely false; and,
  • The defendant knew the information they provided was false.

Providing accidentally incorrect information, without intentionally defrauding the government, is one defense a tax fraud attorney may raise. It’s far more difficult to prove intent unless the defendant directly benefitted from the false tax information.

Remember, the actions above must be intentional. Forgetting your social security number, not understanding how to file taxes or maintain paperwork, and being a victim of identity theft could raise meritorious defenses in your case.

Retain an expert tax fraud attorney

When freedom is on the line, and you’re willing to prove the tax errors were innocent mistakes, an attorney must be retained for your protection. Consider superior representation an investment into your future freedom – one that you shouldn’t delay in making.

Cases that head to trial require planning. Investigating the tax return, looking over financial records, polling witnesses and working toward amicably resolving (or dismissing) your case takes time. Head into court without expert counsel, and most tax fraud cases will end unfavorably for innocent defendants. Arizona takes a tough stance against white collar frauds like tax evasion.

Click here for information on other theft crimes in Arizona.