Tax fraud is a much broader subset of the wider field of tax fraud and usually involves an intentional act to deliberately avoid or defeat the payment or assessment of taxes properly owed. Generally, it is essential that anyone charged with committing tax fraud or evading tax payoffs must have a strong defense to their prosecution. That is why tax fraud cases are generally tried in federal court. The United States attorney general’s office is responsible for prosecuting individuals and corporations who are guilty of tax fraud. Because many frauds are committed with the help of a business or corporation, state tax fraud laws also apply to corporate tax dodgers.
Because tax fraud and evasion cases are often heard as a class, or multi-class criminal case, there are many similarities between such cases. For example, tax fraud defense attorneys can use several common tactics to try to defeat or prevent the prosecution of their client. In many cases, tax attorneys use a so-called “innocent spouse” strategy to argue that their client’s wife or husband did not actively work on the day-to-day operations of the business and thus cannot be found guilty of committing fraud upon the government. Similarly, some tax attorneys will argue that their clients cannot be charged with tax fraud if they did not commit any crimes at all on their tax returns.
A good tax attorney, or even a family law attorney, will also be well-versed in tax laws and tax fraud laws. He will know how to argue defenses to the government’s claims, as well as to help build a strong argument to defeat the prosecution’s main points. One way that tax attorneys seek to defeat prosecution arguments is by pointing out inconsistencies or anomalies with the government’s tax records and tax fraud statements. In some cases, this may seem like a simple proof that the tax records do not accurately reflect income, but tax attorneys have much more to offer the government’s witness. Often, tax attorneys will find deductions or other errors in the tax returns of a client that the prosecution is hiding. The government may be struggling to prove its case, but tax attorneys will usually make sure that the prosecution proves nothing.
Another way a tax lawyer can help his client is by finding ways to reduce his current tax rate. If a client is able to secure a lower tax rate – or interest rate – this can reduce his tax debt or penalties substantially. This may be enough to convince a judge to reduce the total tax debt of his client or to allow him to avoid jail time for tax evasion. Even a simple adjustment to a lawyer’s fee could make a huge difference to a client’s ability to pay his taxes and avoid tax fraud and other legal problems.
Sometimes, a tax lawyer’s job is to represent a client who has fallen into some sort of financial turmoil, such as defaulting on a mortgage loan or falling behind on child support payments. Other clients are represented by tax attorneys because of crimes such as tax fraud and evasion. Tax crime is a very serious crime with serious consequences. Tax evasion involves dishonest behavior; tax fraud, on the other hand, does not. A family lawyer’s expertise is in dealing with both types of cases.
Tax fraud and evasion cases are not easy to win. In many cases, the prosecution’s evidence may be overwhelming, or the defense’s witnesses may not be credible. If the defense wins, it must pay the tax penalty or the evidence against the defendant is discarded. If the defendant is convicted, he faces jail time and other monetary damages.