Fraud is an intentional deception or misrepresentation made for personal gain or so that another will act on the deception to his or her legal detriment. Fraud is a dishonesty used to gain a calculated advantage. Fraudulent behavior is illegal regardless of what type of fraud is committed.
Tax fraud is a serious allegation because it is a fraud committed against the government. Tax fraud charges that can be levied against a taxpayer include, but are not limited to, failure to report income, filing tax returns that are inaccurate, false or incomplete, claiming deductions that do not apply, and hiding offshore funds. Tax fraud can relate to business income tax, personal income tax, cigarette tax, property tax, and sales tax.
If convicted of tax fraud, you face severe consequences including criminal prosecution. Tax fraud can include significant fines and even jail time.
As a result, your career could be on the line if you are faced with tax fraud. Tax is a crime of moral turpitude. Fraud necessarily requires the intent to deceive, which puts your moral character in question. Current and future employers may question whether you are too much of a liability to employ. In addition, your family and life in general could be in jeopardy if you are sentenced to jail.
If charged with tax fraud, it is important that you hire a tax lawyer. You should not speak to anyone other than your lawyer about your tax case, because any information you give to anyone can be used against you in court. Communications with lawyers are protected by the attorney-client privilege.
Similarly, employers can be charged with tax fraud. Businesses and companies can face tax fraud charges for paying “under the table” wages or off the books, intentionally misclassifying workers as independent contractors, or for State Unemployment Tax Act (SUTA) dumping which involves creating companies to manipulate the tax system and improperly obtain a lower tax rate.