The Internal Revenue Service (IRS) was recently accused of “flagging too many legitimate tax returns as potentially fraudulent.” The accusations were made by a taxpayer advocate within the agency, who also stated that “taxpayers are unduly burdened with a quirky authentication process that sometimes requires taxpayers to authenticate their identities in person.”
The report, published by Fox Business, points out a concerning issue. These allegations are not easily brushed off. It does not simply involve the IRS claiming a taxpayer forgot to fill in a blank space or neglected to include a copy of a required form. These are allegations of criminal activity. Allegations that must be overcome or the taxpayer could face serious criminal penalties if the agency builds a successful case that results in a conviction.
How serious are allegations of filing a fraudulent return?
An accusation of filing a fraudulent return is a serious matter. Criminal penalties for a conviction for fraud and false statements on tax paperwork can include:
- Fine. A monetary fine of $250,000 for individuals and $500,000 for corporations can apply if the tax filer is found to have willfully filed a fraudulent return.
- Imprisonment. A prison sentence is also a possibility. An individual can face a sentence of up to three years of jail time.
The agency also notes that additional penalties can apply depending on the details of the allegations. Both monetary fines and imprisonment can apply if the person is found to have attempted to interfere with the administration of these laws or if the agency can establish that there was a conspiracy to commit these crimes.
What should I do if I am accused of filing a fraudulent return?
Take the accusation seriously. Get legal counsel. An experienced tax attorney can review allegations of tax fraud and build a defense to better ensure your legal rights are protected.
