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Facts about being subjected to a tax fraud investigation

| Mar 29, 2021 | White Collar Crimes |

One of the more commonplace types of white-collar crimes prosecuted in Michigan and elsewhere in the United States is tax fraud. There are a number of key facts you need to understand if you are concerned you may be the target of a tax fraud investigation.

Definition of tax fraud

Before diving deeper into the ins and outs of a tax fraud investigation, you need to understand the legal definition of this relatively frequently occurring offense on the broader list of white-collar crimes. Tax fraud is defined as a situation in which a business or individual willfully falsifies information on a tax return and associated documents as a means to illicitly lower, limit or eliminate an otherwise lawfully existing tax liability.

Frequent examples of tax fraud

Tax fraud comes in a number of different forms. With that said, more frequently occurring examples of tax fraud include:

  • Failure to report taxable income
  • Claiming false tax deductions
  • Claiming personal expenses as business expenses
  • Using a false Social Security number

What to do if you are targeted for a tax fraud investigation

Before considering tactics to employ if you are targeted for a tax fraud investigation, you need to appreciate that you might not know you are being investigated for this type of crime, at least initially. If you learn that you are the focus of a tax fraud investigation, two important facts must be remembered.

First, you have the right to remain silent. You do not have to ask questions presented by an investigator, whether from the Internal Revenue Service or the Federal Bureau of Investigation. Second, you should be as proactive as possible in retaining experienced legal counsel.