Everyone dreads the heart-pounding moment when you receive an unwanted notice from the IRS informing you that there has been an issue with your tax return, and it can become unbearable when those issues result in tax litigation. You might be surprised to learn that there is a significant amount of both criminal and civil tax litigation in the US every year.
Which Tax Issues Are Most Commonly Litigated?
Typically, the issues being litigated concern the omission of income or the availability of deductions. In most cases, there is an element of fraud, in that taxes have been intentionally withheld through the use of deception. As taxes can be imposed at each of the US federal, state and local levels, proceedings should be brought in the proper court and therefore the venue for litigation will depend on the type of issue at hand.
Is It a Civil or Criminal Offense?
Title 26 of the United States Code (USC) contains the rules governing federal income tax matters for both civil and criminal tax litigation purposes. Title 28 of the USC contains the statutes governing civil litigation and Title 18 contains the statutes related to criminal matters. There are a number of tax-related criminal offenses within the USC which relate to fraudulent activity such as:
- The attempt to evade or defeat tax
- The willful failure to collect or pay tax
- The willful failure to file a return, supply information, or pay tax
- Providing fraudulent returns, statements, or other documents
This list is not exhaustive and there are a number of other statutes that allow for the prosecution of tax-related criminal offenses within the US.
What Is My Defense?
If you are currently facing civil or criminal proceedings you may be wondering what defenses are available to you? Typical defenses to tax crimes include:
- The failure to comply was not willful but due to negligence or error
- The compliance requirement was not met by a third party, such as an accountant
- The taxpayer lacked the mental capacity to commit the offense
There can also be rare occasions when the government acted improperly because of the taxpayer’s race or religion, or that the government induced the taxpayer to commit the offense.
Tax litigation, whether civil or criminal, can be both stressful and complex, therefore it is always recommended that you have a skilled and knowledgeable attorney to represent you. If you have been targeted by the IRS and you would like to discuss your options with an experienced attorney we invite you to call the Scammahorn Law Firm today at (903) 595-1000.