Maryland Criminal Tax Attorneys - Representing those facing income tax fraud charges in Baltimore, Annapolis & Washington DC area
Because of its virtually unrivaled powers of investigation and enforcement, the Internal Revenue Service and its Maryland state counterparts can prove to be truly formidable adversaries, particularly for anyone accused of criminal tax evasion. Allegations of willful attempts to defeat either the assessment or payment of taxes can lead to hefty fines and even imprisonment, and therefore it is essential to mount a vigorous defense if you are the target of such charges.
At Rosenberg Martin Greenberg, we understand the fear and uncertainty an IRS tax investigation can cause, and our Baltimore criminal tax attorneys stand prepared to provide the help and guidance you need in order to achieve resolution.
Types of Tax Evasion
Tax evasion is itself a subset of the broader category of tax fraud and involves a willful attempt to evade or defeat the assessment or payment of taxes rightly owed. It is important to note that in order to succeed in a tax evasion case, the government is required to prove intentional violation of known legal duties on the part of the taxpayer.
In an evasion of assessment case, it must be shown that:
- The accused engaged in an affirmative act intended to evade or defeat taxes
- A material dollar amount of taxes is in fact owed
- The accused acted in a willful or intentional manner
Common actions triggering evasion of assessment charges include a failure to declare the full amount of your income, overstating deductions or expenses, or simply not filing returns if taxable income has been earned.
Evasion of payment cases require the government to show:
- The existence of an assessment of taxes due and owing
- The accused engaged in an affirmative action meant to evade payment of that amount
- The accused individual acted willfully
Some examples of conduct that has been found to constitute evasion of payment include filing of dishonest financial statements when negotiating an Offer in Compromise or requesting an installment payment plan, transferring assets to a non-debtor spouse for less than fair market value, or even attempting to shelter funds abroad.
"Badges of Fraud" in IRS Investigations
Though willfulness is a critical element of tax fraud and evasion cases, direct evidence of fraudulent or unlawful intent is often difficult for the IRS to obtain. Thus, auditors and investigators are well-trained in the art of spotting "badges of fraud" which tend to support allegations of an intent to mislead the government.
Some of these key indicators include:
- Accounting irregularities
- Cash dealings
- Insufficient record keeping
- Asset transfers
- Fictitious deductions
- Blatant understatement of income
While none of these factors alone may be sufficient to trigger prosecution, a pattern of behavior or set of unfortunate coincidences can place even innocent taxpayers in the agency's crosshairs.
Fortunately, taxpayers who are able to mount a reasonable argument regarding their misunderstanding of the tax laws or who can offer a plausible explanation for why they failed to pay taxes due and owing stand a good chance of prevailing. A Baltimore criminal tax lawyer with Rosenberg Martin Greenberg can conduct a comprehensive analysis of your situation, review all relevant records, and develop a sound criminal tax defense strategy aimed at achieving a favorable outcome in your case.
Tax Evasion Defense Strategies
Considering the fact that tax evasion is classified as a crime, many traditional defenses from the realm of criminal law may be available and applicable to your case.
Perhaps the most important line of defense in a tax evasion cases will be to claim the government simply does not have sufficient concrete evidence to demonstrate the element of willfulness. This can be a high hurdle for the IRS to meet, and an experienced criminal tax attorney can be your greatest ally in raising that bar even higher by pointing to gaps and deficiencies in the government's case.
It may also be possible to mount a defense founded on the concept of mistake. While claiming that you simply did not know you were obligated to pay taxes is certain to fail, you may be able to succeed by arguing uncertainty about specific types of reporting or payment requirements. The distinction can be a tricky one for taxpayers to make, and that is why the help of a seasoned Baltimore tax attorney can prove invaluable.
Finally, defenses based upon the applicable statute of limitations can often succeed where others may have faltered. When it comes to civil tax fraud, there is no time limitation within which the IRS must pursue penalties.
For tax evasion cases, the statute of limitations provides that the government has six years from the time of the allegedly willful act of evasion to initiate charges. However, there are certain types of behaviors or activities that can toll the statute for an indefinite period of time.
An attorney with Rosenberg Martin Greenberg can make a concrete determination of how the statute of limitations should be applied in your case and raise available and appropriate defenses on your behalf.
Potential Penalties in Tax Evasion Cases
Though it is true that only a small percentage of taxpayers will ever be subjected to charges of tax fraud or tax evasion, that fact is cold comfort to those actually facing such allegations and the steep penalties they can bring.
Pursuant to 26 U.S.C. 7201, individuals found guilty of federal tax evasion may be subjected to fines not exceeding $250,000 and/or imprisonment for a term of up to five years. Those guilty of willfully failing to file returns or supply information can face fines upwards of $100,000 and imprisonment of up to one year.
Fraudulent or false statements made in tax returns or supporting documents can subject individuals to imprisonment of up to three years and fines of $250,000.
There is no denying the fact that the stakes in tax evasion cases are often quite high, and it is unwise for a taxpayer to attempt to do battle with the IRS on their own. If you have been confronted with allegations of tax fraud or evasion and are unsure how to defend against them, an attorney with Rosenberg Marting Greenberg can provide the insights and expertise you need.
Skilled Baltimore Criminal Tax Attorneys
For many, the concept of tax evasion immediately calls to mind cases involving high profile individuals and Hollywood celebrities who have been prosecuted in recent years for attempting to sidestep their obligations to the government.
Prosecutions of actor Wesley Snipes, singer Lauryn Hill and Beanie Babies founder Ty Warner have drawn widespread attention in recent years. However, it is not just the rich and famous who can attract the scrutiny of the IRS or Maryland tax authorities. Small business owners, entrepreneurs and individual taxpayers alike must remain vigilant in the face of investigation from which no one is entirely immune. With the assistance of a team of knowledgeable attorneys on their side, they can do precisely that.
Possessing extensive experience handling all aspects of state and federal tax matters and litigation, the criminal tax attorneys of Rosenberg Martin Greenberg have earned a reputation for providing clients an unmatched level of service and professionalism.
To schedule a consultation call Brian Crepeau at 410.649.4981 or email firstname.lastname@example.org.
Talk to a Baltimore Tax Attorney Today
If you are seeking counsel for a tax related legal matter, contact the Rosenberg Martin Greenberg Tax Controversy experts.
Tax Controversy News
At best, a business tax audit will consume only time and personnel resources. At worst, you and your business could face criminal charges and payments of additional taxes, fines, and penalties. Moreover, if the audit uncovers fraudulent activity, substantial underpayments of taxes, or unreported income an audit can be expanded from three to six years,…
For married couples who reside in Maryland, the question of whether to file taxes jointly or separately can be a burdensome task. Many people assume that joint filing is expected or more advantageous, but the interaction of federal and state tax laws can complicate the decision. Baltimore-based tax law firm Rosenberg Martin Greenberg can help…
Colliot and Its Effect on Penalties for Potential FBAR Violations: Ruling Provides for Significant Limitation on Amount of Penalties
On May 15, 2018, the United States District Court for the Western District of Texas issued an important ruling concerning the application of willful FBAR penalties under 31 U.S.C. § 5321. In United States v. Colliot, Case No. AU-16-CA-01281-SS (W.D. Tex. 2018), the court held that the Internal Revenue Service (“the Service”) could not assess…