How To Hire a Tax Fraud Attorney

February 1, 2019

As we’ve shown repeatedly in our blog posts, money has a way of bending moral principles. You can take an otherwise upstanding, law-abiding person, and once money is involved, things seem to change. We’ve seen this with insider trading, for instance. Martha Stewart, once a highly regarded public figure, succumbed to the pull of money when she sold thousands of shares using confidential information. In this post, we’ll look at tax fraud, its characteristics, and how to deal with it.

It’s A Financial Crime

Like insider trading, tax fraud is another financial crime which involves deception. Tax fraud, also referred to as “tax evasion” in certain sources, is a serious offense and carries severe consequences. In fact, tax fraud is a classified as a felony and can result in a prison sentence of up to 5 years. In addition to a prison sentence, tax fraud convicts can also be fined up to $100,000 ($500,000 for corporations).

Today we’ll provide a clear definition of tax fraud and give some examples of fraudulent behavior. We will also highlight the reasons why hiring an attorney can be beneficial in such cases. What’s more, we will also identify some of the things a person should look for in a prospective tax fraud attorney. Again, penalties for tax fraud can be very severe, and so it’s important that the right attorney be hired. Competent tax fraud attorneys may be expensive, but the expenses will undoubtedly outweigh the potential consequences.  

A Quick Definition of Tax Fraud 

Simply put, tax fraud is the willful or intentional falsification of information in order to reduce one’s tax liability. Falsification can take many different forms. The most common forms involve claiming false deductions, failing to report income, and using a false social security number. Falsification can result from both commission or omission. Failing to report an essential piece of information is just as fraudulent as actively giving information which is untrue.  

Legally, tax fraud is very different from tax avoidance. Tax avoidance refers to the lawful minimization of one’s tax burden. As long as the steps be legitimate, a person may take steps to minimize their tax liability. A person can take many creative steps to reduce their tax burden provided that those steps are lawful. Tax fraud, on the other hand, is illegal because it involves intentional falsification for the purpose of reducing tax liability. If a person claims a legitimate deduction on their tax return, this is considered lawful tax avoidance. If a person fails to report income on their return, this is considered illegal tax fraud. 

More Than Mere Negligence

Tax fraud is also distinguishable from tax negligence. The key distinction between the two phenomena pertains to the intent behind them. If a person intentionally takes an exemption for a non-existent dependent, this would be tax fraud. But, if a taxpayer makes a computational mistake when filing their taxes, this may be considered negligence. Tax negligence may still carry monetary penalties, but negligent behavior will not lead to criminal prosecution.  

Hiring the Right Attorney is an Important Decision 

If you find yourself charged with tax fraud, hiring the right attorney is a hugely important decision. If you fail to pick the right attorney, this can mean the difference between no jail time versus jail time. It can also mean the difference between a small fine and a very large fine.

When you pick your attorney, there are several things you should look for. One indicator of a good prospect is a good track record. If your prospect has a record of achieving satisfactory results in tax fraud cases, then you may have a solid candidate. But if your prospect lacks such a record, or has negative reports from past clients, then you may want to move on.

Most significantly, should your prospect have been formally punished by the ABA, this is a definite red flag. With so much on the line, you should always take into account the past behavior of your prospective attorney. 

Negotiating Ability

Another thing you should look for in a prospective tax fraud attorney is negotiation ability. Although tax fraud is a crime and can lead to jail time, actual consequences vary depending on the facts. The government has an interest in obtaining as much tax money as is possible in tax fraud cases. Given this reality, it is possible to bargain with the government in order to achieve the best outcome. An attorney with solid negotiation skills will be able to hash out the best deal with the government. Negotiation skills are critical: a skilled negotiator can lead to a good settlement and the avoidance of jail time.

The government is concerned about deterrence and rehabilitation, but it is also a very pragmatic entity. In tax cases, the government is deeply concerned with acquiring the largest sum it possibly can from a given taxpayer. An attorney with excellent negotiation skills can help you carve out a good deal. 

Hire the Right New York Tax Attorney

Here at Mackay, Caswell & Callahan, P.C., our professionals are intimately familiar with tax matters. We regularly deal with clients who have tax debt issues and know the boundaries of fraud inside and out. We know, more than any other firm, the importance of carefully selecting the very best attorney for a case. Having a qualified attorney in difficult situations can make a world of difference. If you need counsel related to taxes, reach out to our top New York City tax attorneys for assistance today. 

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