Planet

Tax Fraud Lawyer

Tax crimes are one of the most complex areas of criminal and corporate law. Errors in tax reporting, suspicions of tax evasion, accusations of fraud, or financial manipulations can lead to serious consequences: fines, account freezes, and even imprisonment. In such situations, urgent and professional intervention by an experienced tax fraud attorney is required.
Our professional solicitors will help avoid potential risks, protect assets, and minimize consequences. A team of experienced tax fraud attorneys led by a leading solicitor Dr. Anatoliy Yarovyi guarantees protection during tax audits, contesting fines and sanctions, representation in court, and negotiations with tax authorities.

Contact Extradition Lawyers!
services

What is Tax Fraud?

Tax fraud is the deliberate violation of tax legislation to evade tax payments or obtain illegal tax deductions, refunds, or other financial benefits. It falls under the category of financial offenses and may result in both civil penalties and criminal charges that may result in substantial fines and imprisonment.

tax fraud lawyer

For a specific action to be classified as federal tax fraud, it must possess several characteristic features:

  • Deliberate evasion: the taxpayer knowingly conceals income, understates its amount, or forges documents, being aware that they are breaking the law;
  • Falsification of financial documents: use of fictitious invoices, forged contracts, false declarations;
  • Creation of tax evasion schemes: use of shell companies, fictitious counterparties, offshore structures;
  • Concealment of actual activities: maintaining “double accounting” or registering transactions under third parties;
  • The use of fictitious tax deductions and benefits: a declaration of tax deductions to which a company or individual is not entitled;
  • VAT fraud: issuing false VAT refunds, manipulations with export supplies;
  • Money laundering: the use of fake tax returns to legalize income obtained through criminal means.

Common types of tax fraud crimes

Many different criminal schemes qualify as tax fraud:

  1. Tax evasion. Consists of understating the tax base, non-payment of taxes, or falsification of reporting. This may include concealing part of income from taxation, deliberate understatement of company profits, overstating deductions and use of false tax deductions to evade paying taxes;
  2. VAT fraud. Commonly encountered in countries with a high VAT rate. Main schemes: “Carousel fraud” – arranging fictitious export operations for illegal VAT refunds; registering shell companies to obtain tax benefits; creating fictitious transactions between companies to artificially increase tax deductions;
  3. The use of offshore companies. This includes concealing the real owner of the company, fictitious business operations through offshore entities, transferring funds to jurisdictions with low taxation without actual business activities;
  4. Fictitious employment of staff. Some companies register fictitious employees to reduce the taxable base or obtain tax benefits. Common schemes: “black cash” – payment of part of the salary unofficially, without paying taxes; registering employees as sole proprietors (ИП) to reduce the tax burden;
  5. Falsification of reporting. Use of fake invoices, contracts, and delivery notes. Manipulations with accounting records to conceal income or inflate expenses.

In most countries, tax fraud is considered a serious crime as it harms the state budget and undermines the country’s financial system.

How the IRS Defines Tax Fraud?

The IRS considers tax fraud as a deliberate violation of tax law to reduce tax liabilities or obtain unlawful tax benefits.

The key word here is “willful”. If a taxpayer made a mistake in the declaration out of ignorance or negligence, this may result in fines but is not considered fraud. However, if the actions were deliberate and aimed at deceiving the tax authority, this is already classified as a criminal offense.

The IRS uses strict criteria to identify tax fraud. If the tax authority detects at least one of the following signs, a more thorough investigation begins:

  • Willful Failure to Report Income. The taxpayer deliberately conceals part of their taxable income or does not file a tax return at all. Examples: hiding income received from business, investments, or freelancing; using illegal methods to transfer money abroad; maintaining double bookkeeping to conceal actual income;
  • Overstatement Deductions or Business Expenses. The IRS carefully checks to ensure that taxpayers do not overstate tax deductions and expenses to avoid paying taxes. Common violations: claiming deductions for non-existent charitable donations, inflating business expenses that are not actually related to conducting activities, categorizing personal expenses as business expenses;
  • Falsification of Records. Any manipulation with tax returns, accounting reports, and financial documents is a serious violation. Such actions include altering amounts in tax forms to reduce the taxable base, using forged invoices or fictitious contracts, creating shell companies to conceal income;
  • Use of Nominees or Shell Companies. Taxpayers register shell companies or use nominal owners to conceal actual income;
  • Offshore Tax Evasion. Tax fraud may include transferring funds to offshore accounts and using complex financial structures to conceal assets. The IRS actively cooperates with international tax authorities to locate undeclared assets abroad.

If you have any questions regarding US tax legislation or are facing accusations of tax fraud, contact our experienced lawyers. We will help protect your interests and minimize potential risks.

Could You Be at Risk of Criminal Tax Fraud Charges?

When facing federal tax fraud investigations, urgently contact an experienced attorney. Independent attempts to interact with the tax authority may worsen the situation and lead to criminal prosecution.

Tax authorities distinguish between unintentional errors and deliberate tax evasion. In the first case, the taxpayer may get away with fines and additional tax liabilities. However, if the tax service proves intent, this could escalate into a criminal case.

Tax authorities use advanced analytical tools and international agreements for the exchange of financial data. The main methods for detecting tax fraud include automated analysis of declarations (searching for anomalous data, and discrepancies in reporting), comparison of data with bank transactions, checking offshore accounts, and questioning witnesses and employees.

If you have received a notification of an audit or a tax fraud case has been initiated against you, it is necessary to act urgently. Do not speak with tax authorities without an attorney; any words can be used against you. Gather all financial documents: tax returns, bank statements, and accounting reports. Do not destroy documents, as this may be interpreted as an attempt to conceal evidence. Contact a tax lawyer as soon as possible. A qualified specialist will help assess the situation, gather clear and convincing evidence to support your case, and develop a defense strategy.

Tax Fraud Penalties

Punishments for tax fraud vary depending on the jurisdiction, the amount of evasion, and the presence of intent.
In the USA, the investigation of tax crimes is handled by the Internal Revenue Service (IRS) agents and the Department of Justice (DOJ) prosecutors. Depending on the severity of the potential criminal violation, the taxpayer may face:

ViolationFineImprisonment
Tax evasionUp to $250,000 for individuals, up to $500,000 for companiesUp to 5 years
Falsification of a tax returnUp to $100,000Up to 3 years
Failure to submit a tax returnUp to $25,000 for each missed declarationUp to 1 year
False tax deductions75% of the amount of unpaid taxUp to 3 years
Conspiracy with the aim of tax evasionUp to $250,000Up to 5 years
Money laundering through tax schemesConfiscation of assets + up to $500,000 fineUp to 20 years

Additional consequences of federal tax crimes may include the freezing of the suspect’s accounts and assets, confiscation of illegally obtained income, and in particularly large cases, civil lawsuits from the state.

In the United Kingdom, tax crimes are investigated by HM Revenue & Customs (HMRC).

tax fraud
ViolationFineImprisonment
Deliberate tax evasionUp to 200% of the tax amountUp to 7 years
VAT fraudUp to 100% of the amount of the unlawful refundUp to 10 years
Offshore tax evasionUp to 300% of the evasion amountUp to 10 years

Additional consequences: confiscation of assets, freezing of bank accounts, disqualification from conducting business.

Each EU country has its own tax laws, but the main penalties are as follows:

CountryMaximum fineMaximum term of imprisonment
GermanyUp to 500% of the evasion amountUp to 10 years
FranceUp to 3 million eurosUp to 5 years
ItalyUp to 240% of the evasion amountUp to 6 years
SpainUp to 600,000 eurosUp to 6 years

Fines for federal tax fraud crimes can reach hundreds of thousands of dollars, and in some cases, lead to imprisonment. If a tax investigation is being conducted against you or your company, do not delay – contact professional lawyers.

Precautions and Preparations for Tax Fraud

Regardless of whether you are a business owner, a private entrepreneur, or simply a taxpayer, it is important to take preventive measures to avoid risks and protect yourself from tax issues.

To avoid the risk of committing tax fraud, proper record-keeping is critical. Use certified accounting software. Record all income and expenses in reports. Regularly reconcile accounting documents with the tax return.

Regular internal audits will help identify errors before the tax authorities begin an investigation. Check the compliance of tax reports with actual financial transactions. Correct inaccuracies in reporting in advance. Work with auditors who will help minimize tax risks.

Some tax optimization schemes may appear legal but can, in practice, lead to accusations of fraud and criminal tax investigation. Beware of offshore schemes without real economic activity, fictitious contracts and fake expenses, inflated tax deductions, and fabricated losses.

Delays in submitting tax documents may raise suspicion. Ensure that declarations are submitted on time. In case of a delay, notify the tax authorities and clarify the possibility of an extension to avoid tax problems.

If you are still expecting a tax audit, it is important to prepare for it thoroughly. Before the audit, ensure that you have all the necessary documents: financial reports and balance sheets, contracts with counterparties, primary accounting documents (receipts, invoices).

If there is a risk of a tax audit, it is important to enlist the support of lawyers. A tax solicitor will help protect your rights. A lawyer will prevent unlawful actions on the part of tax authorities. The specialist will develop a defense strategy and help resolve contentious issues related to tax fraud charges.

Consultation With Tax Fraud Lawyer

If you have been summoned for questioning by the tax authority, are undergoing a tax audit, have been accused of tax evasion, your accounts are frozen, and your business or assets are under threat due to tax claims, seek assistance from qualified lawyers as soon as possible.

In all these cases, independent attempts to deal with tax authorities can lead to even bigger problems like criminal tax fraud charges by the Internal Revenue Service (IRS). You may give testimony that will be used against you or agree to fines that could have been avoided. A lawyer specializing in tax crimes knows all the nuances of legislation, tax audits, and tactics, which will help to effectively build a defense strategy and avoid serious consequences.

Our tax fraud lawyers provide a full range of services for protecting interests in tax disputes:

  1. Consultation and analysis of the situation. We examine your case, analyze tax documents, and check the federal tax crimes you’re accused of. We identify possible risks and weaknesses in the position of the tax authorities. We develop a defense strategy and minimize consequences;
  2. Accompanying tax audits. We monitor the legality of actions taken by tax inspectors. We prepare documents and explanations to prevent accusations of fraud. We challenge unlawful claims by the tax authorities;
  3. Negotiations with tax authorities. We represent your interests in dialogue with tax services. We achieve case resolution without court proceedings. We protect your rights and strive for fair decisions.
  4. Legal defense in criminal cases. We develop a strong defense strategy in the event of a criminal case being initiated. We challenge the prosecution’s evidence, seek to mitigate punishment, or have charges dismissed. We represent your interests in court, protecting business and personal assets;
  5. Assistance in unblocking accounts and assets. We achieve the unfreezing of financial funds. We help to avoid full confiscation of property.

We work with clients worldwide, helping to protect their interests in complex tax disputes. Our lawyers have deep knowledge of international tax law, which enables them to successfully resolve even the most challenging federal charges. Hundreds of clients have successfully avoided unjust tax accusations and preserved their assets thanks to our assistance.

Contact us right now for an initial consultation and the development of an effective interaction strategy. We will help protect your rights, minimise fines, and avoid criminal liability.

Dmytro Konovalenko
Senior Partner, Attorney-at-law, admitted to the Bar (Certificate to practice Law #001156)
Dmytro Konovalenko is a member of the International Association of Lawyers, bringing a wealth of expertise to his practice. He focuses on cases involving Interpol, where he has successfully contested Red Notices and extradition requests. Dmytro has implemented effective preventive measures for clients hailing from Europe, Asia, and the Far East, showcasing his ability to navigate the complexities of international law. His extensive experience in extradition matters further enhances his skill set, allowing him to provide comprehensive legal support tailored to the unique needs of each client.

    Planet
    Planet