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Could an audit lead to tax evasion charges?

On Behalf of | May 14, 2021 | IRS Issues

Having the IRS looking over your shoulder likely makes you and other Atlanta residents ensure that you handle your taxes appropriately. However, even if you do your best to file taxes correctly, you could end up facing an audit from the IRS. This process is not always as harrowing as it seems, but if the IRS suspects wrongdoing, a simple audit could turn into an investigation for tax evasion. 

You would undoubtedly never fathom taking purposeful measures to avoid taxes to the extent that it would lead to criminal charges. Still, if the IRS believes that you have lied during an audit in an attempt to cover up wrongdoing or withheld documents, it is likely that criminal charges will result. The IRS could also pursue tax evasion charges if the agency discovers that you have been taking steps to avoid paying your full tax obligations for several years, which could show a pattern of willful behavior. 

What will the IRS look at? 

The IRS has a duty to investigation and pursue the prosecution of cases involving tax evasion. Some details that the IRS will likely look into during an audit to determine whether evasion occurred include: 

  • Whether evidence shows inflated expenses or deductions 
  • Whether false income records exist 
  • Whether evidence suggests you have underreported your income 
  • Whether you did not report income earned from contract work or after receiving cash payments 

Of course, the IRS will look into every financial area of your life as necessary during an audit. This can feel invasive and frightening, but even if authorities suspect you of wrongdoing, you still have the ability to defend against any allegations they make against you. 

How can you protect your interest? 

You may want to keep in mind that the IRS is not infallible, and the possibility exists that the agency could mistakenly accuse you of wrongdoing. As a result, you would be wise to understand that an accusation does not mean you are guilty and that you could realistically maintain your innocence throughout this type of case. 

Reviewing your tax and income-related documents could be a good place to start after receiving notice of an IRS audit. Additionally, one of the smartest steps you could take at the first sign of an audit is to gain information on your options and your legal rights. 

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