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What Should You Do if You Knowingly Filed False Returns (or Failed to File Returns) with the IRS?

Posted in Offshore Account Update on June 30, 2022 | Share

Federal law requires all U.S. taxpayers to accurately report their income, employment and other tax liability to the Internal Revenue Service (IRS) annually. Owning offshore assets can trigger additional filing requirements as well. Failing to meet these requirements can have serious consequences, and knowingly failing to meet them can significantly increase the risks involved In this article, Washington D.C. tax attorney Kevin E. Thorn, Managing Partner of Thorn Law Group, explains what you need to know if you have knowingly failed to meet your obligations to the IRS.

Knowingly Violating Federal Tax Laws Can Lead to Criminal Prosecution

Under U.S. tax laws, taxpayers can face interest and penalties any time they fail to meet their federal tax obligations. This applies to all obligations—from the obligation to pay personal income taxes to the obligation to report offshore accounts.

But, knowingly violating federal tax laws can lead to criminal prosecution. In criminal tax fraud cases, the fines can increase substantially and taxpayers can face years—and potentially even decades—of federal imprisonment.

IRS Criminal Investigation (IRS CI) recently highlighted a case in which a small business owner pleaded guilty to knowingly filing false returns. Over a six-year period, the business owner cashed checks totaling more than $1.6 million at a local check-cashing business and failed to report the associated income to the IRS. Having underpaid his federal income tax liability by more than $450,000, the business owner is now facing up to three years behind bars.

Options for Resolving Intentional Federal Tax Law Violations

If you have knowingly violated federal tax laws and want to avoid the risk of criminal prosecution, what can you do?

In this scenario, taxpayers’ primary option is to utilize IRS CI’s Voluntary Disclosure Practice. As IRS CI explains, “[a] voluntary disclosure will not automatically guarantee immunity from prosecution; however, a voluntary disclosure may result in prosecution not being recommended.”

The Voluntary Disclosure Practice is only available to U.S. taxpayers who have knowingly violated the law (there are other options for those who have made inadvertent filing errors). If you have knowingly violated federal law—and you are not currently facing an IRS audit or IRS CI investigation—making a voluntary disclosure could minimize your penalty liability while also eliminating the risk of facing federal charges.

Given that immunity from prosecution is not guaranteed, when seeking to make a voluntary disclosure it is essential to work with an experienced Washington D.C. tax attorney. An attorney who regularly assists U.S. taxpayers with voluntary disclosures should be able to help confirm whether you qualify, evaluate any alternatives you may have, and then work with IRS CI on your behalf to negotiate a favorable resolution.

Request a Confidential Consultation with Washington D.C. Tax Attorney Kevin E. Thorn

If you have knowingly violated federal tax law, it is important that you speak with an attorney as soon as possible. To schedule a confidential consultation with Washington D.C. tax attorney Kevin E. Thorn, Managing Partner of Thorn Law Group, call 202-349-4033, email ket@thornlawgroup.com or contact us confidentially online now.


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"The attorneys at Thorn Law Group, PLLC have significant experience in all phases of tax controversy, fraud and tax litigation. The Managing Partner, Kevin Thorn, is incredibly personable, yet also brilliant at what he does. Kevin's depth of knowledge in tax administration and procedure provides us with valuable insight into the government's and the courts' perspectives in our case. I would definitely recommend the firm to anyone with needs in resolving any kind of tax disputes."
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