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Behavior during audit could lead to criminal tax case

On Behalf of | Feb 13, 2019 | Tax Audits

Criminal tax cases are relatively rare in Georgia. Tax professionals and attorneys will say that one common way to bring on a criminal case related to taxes is to be evasive or obstructive during dealings with the Internal Revenue Service. It’s something to keep in mind during an audit, the behavior of the person being audited could turn the case into a criminal one. When an auditor comes across suspicious behavior during an audit, he or she can alert the Criminal Investigation Division of the IRS.

The IRS is under no obligation to inform the person that the criminal referral is happening. In most cases, the audit will be suspended without any explanation while the IRS builds a criminal tax case. People who make false representations to auditors are exposing themselves to criminal liability. This is not to say that people should simply agree with the IRS version of events, but good faith, above- board communication is important.

In cases where people attempt to evade payment or communication with the IRS during an audit, the cover-up can be worse than the crime. Even very serious audits and some criminal IRS proceedings do not carry the penalties the person might face if he or she is obstructive during an audit. Things like instructing employers to make payments to fictitious companies to avoid tax obligations can result in more serious charges and IRS officials who feel like they’re being disrespected.

Individuals who are having problems with the IRS might want to schedule a meeting with an attorney. An attorney with experience in audit defense might be able to help by examining the facts of the situation and communicating with the IRS in a way that is transparent, but still keeps the client’s interests at the fore. An attorney might be able to negotiate an acceptable outcome or argue on behalf of the client during official proceedings.