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What Michael Cohen teaches us about tax law

On Behalf of | Dec 14, 2018 | IRS Issues

Those watching television or reading the news in Georgia have probably heard about Michael Cohen. They may also know that he pleaded guilty to tax evasion and was sentenced to prison time. Those who would like to avoid a similar fate can take some steps to do so. For instance, taxpayers should be sure to report all of their income each year when filing a tax return.

Income is generally subject to taxation regardless of where it was earned. In the event that a person does receive an audit from the IRS, it is not a good idea to obstruct the investigation. An attempt to lie or game the system could turn a civil matter into a criminal one. Those who don’t agree with what the IRS claims in an audit have the right to dispute those claims, but it needs to be done in accordance with established procedure.

The IRS understands that individuals may make mistakes on their returns. However, willful violations of tax law are considered to be serious offenses. An act could be considered willful even if there was no intent to cheat on a tax return. As a general rule, it is a good idea to be transparent and honest when filing a tax return or talking with the IRS.

Taxpayers who are audited by the IRS will ideally cooperate as much as they can with the process. An attorney may be called upon to represent a taxpayer, which may be beneficial because it means that an individual doesn’t have to work with the IRS directly. Instead, legal counsel may negotiate with the government and take other steps to obtain a favorable outcome. In some cases, this may mean that a person won’t lose assets or have wages garnished.