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How to Defend Against Tax Fraud 

October 26, 2022

How to Defend Against Tax Fraud 

Tax fraud is a crime that can be charged at the state or federal level. Whether you are under investigation by the IRS or by the New Jersey Department of Revenue, you need to take the possibility of prosecution for tax fraud seriously. Not all instances of mistakes on tax returns are intentional, so it is important to know what your legal options are to defend yourself against state and/or federal charges of tax fraud. 

What is Tax Fraud?

It is essential to distinguish between attempting in good faith to take advantage of various legal provisions to minimize one’s tax liability and purposely not paying taxes that one knows that one owes. Various legal mechanisms include claiming various legal deductions from income or taxes, not filing a tax return when one makes less than the federal minimum or requesting a filing extension or payment plan to extend the time to pay taxes. 

However, actions that may constitute tax fraud include failing to file tax returns, claiming residency in a state one does not reside in, underreporting income, or claiming deductions or credit that one is not entitled to when such actions are taken with the intent to avoid taxes one knows that one owes or without a reasonable, good faith basis to take such steps. 

Penalties for Tax Fraud

A conviction for tax fraud at the state or federal level can carry significant penalties. A federal charge of failure to file a tax return or to pay tax liabilities carries a maximum penalty of up to one year in prison and/or a fine of up to $25,000, although in many cases the IRS only imposes financial penalties. However, filing a fraudulent return or otherwise intentionally concealing or misrepresenting financial details to evade paying taxes can result in sentences of three to five years in prison and up to $100,000 in fines. 

Potential Defenses to Tax Fraud Charges

Possible defenses to charges of tax fraud include:

  • Lack of intent, which can include showing that you did not knowingly provide false tax information
  • You had a good faith belief that you were eligible to take advantage of a certain provision of the tax code
  • You relied on the advice of your tax professionals in the preparation of your taxes
  • You inadvertently provided incorrect tax information
  • You did not benefit from the tax error, which was not intentionally made

Why Hiring a Tax Fraud Attorney Is Critical to the Outcome of Your Case

Because not every tax error is the result of a criminal act, if you are being investigated or prosecuted for tax fraud, you need an experienced attorney to help you argue your case and protect your rights. A tax fraud defense lawyer can help you by:

  • Helping you understand your charges and the potential outcomes
  • Thoroughly investigating the facts of your case to recover evidence that can be used to build your defense
  • Working with financial experts when necessary to build a persuasive argument for your defense
  • Negotiating with prosecutors, if appropriate, to try to reach a plea agreement that helps you avoid the harshest consequences of conviction, including prison time

Contact an Experienced Moorestown Criminal Defense Lawyer About Your Tax Fraud Charges in New Jersey

Were you arrested or charged with tax fraud in New Jersey? The consequences of a conviction could be severe, leaving you with a permanent criminal record and possibly even sending you to jail. That is why you need to speak with a qualified criminal defense attorney as soon as possible about your case. The attorneys at Law Offices of Michele Finizio have successfully represented clients charged with tax fraud in Evesham Township, Mount Laurel, Willingboro, Pemberton, and throughout New Jersey. Call (609) 230-0374 or fill out the online contact form to schedule a consultation with a member of our legal team. We have an office conveniently located at 9 E. Main St., Moorestown, NJ 08057, as well as offices located in Cherry Hill.

The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.

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