Staff Photo of The Kronzek Firm

Michigan Tax Fraud And Evasion Attorneys

Michigan tax fraud and evasion attorneys, providing excellent representation for people all over the state of Michigan accused of state or federal tax-related crimes.

Tax evasion is taken very seriously

Tax evasion, also known as tax fraud, is taken very seriously by both the state and the federal government. Penalties can be severe, and without the proper representation, you could be looking at very high fines and even possible prison time. Whether you have been accused of tax fraud, failure to report income, or even unemployment compensation, you are going to need experienced representation during this difficult time.

Being investigated for even the simplest thing, like failing to file an income tax return, or suffering the invasive indignities of an IRS audit can be one of the most stressful things for a person to endure. However, you don’t have to do this alone. Our attorneys have a wealth of experience representing those accused in both business and criminal matters. So regardless of whether the penalties you face are criminal or civil, we are here for you.

Why Tax Evasion Is A Crime

There is a very big difference between tax evasion and tax avoidance. Tax avoidance is actually legal, and refers simply to structuring your financial transactions so that you reap the largest tax benefits. Tax evasion, on the other hand, refers to the intentional avoidance of paying taxes legally owed to the government. And this is very definitely a crime.

Usually, this is done by misrepresenting your financial status to the Internal Revenue Service (IRS). For example, if you fail to report cash earned “under the table”, or if you declare less income than you earned in the year, or even just elect not to file your tax returns, the government will treat this as a crime.

Because your Michigan tax return relies on information that’s provided on the federal tax return, falsifying information on your federal tax return can result in prosecution on both federal and state levels. For example, if someone declared less on their income tax return than they actually make in a year, or overstated their deductions and the IRS audited them, they would likely end up facing charges in both the state and federal courts.

Types of Tax Evasion and Tax Fraud

There are a number of ways in which an individual can defraud the government when it comes to taxes. Some of these are simple mistakes and can happen by accident. But many of them are intentional, and can result in very serious criminal charges. For example:

  • Underreporting income
  • Overestimating expenses or deductions
  • Claiming false deductions
  • Claiming personal expenses as business expenses
  • Failing to collect employment taxes
  • Making false statements to investigators
  • Violating employer withholding requirements
  • Not filing an annual tax return

If you or a loved one has been accused of any of these tax-related crimes, you need to contact us immediately in order to begin creating your defense strategy. Facing this alone can be terrifying, but with the right help from attorneys who possess the knowledge and experience you need, we can work towards a positive outcome in your case.

How Tax Evasion is Discovered and Prosecuted

Being subject to an IRS audit does not mean that you are being accused of a crime, or are going to be faced with charges. The IRS conducts a certain number of random audits every year, on both businesses and individuals. Most of these audits happen without the individual even knowing that it took place, and never result in further investigation.

Sometimes, however, if there is a discrepancy in the tax return, a formal audit will be undertaken where an IRS agent will personally audit someone’s tax return. This tends to happen when a tax return, all of which are processed digitally, raises “red flags”. A red flag refers to anything that strays too far from what are considered to be statistical norms.

But in order for the federal government to prosecute someone for tax fraud, or tax evasion, it is legally necessary that they prove certain things beyond a reasonable doubt. First, it must be proved that the accused has a substantial income tax deficiency. Next, it must be proved that there was an affirmative attempt to evade proper tax assessment, or pay the correctly owed amount. And finally, it must be proved that the accused acted willfully, or knowingly.

Criminal Penalties for Tax Fraud and Evasion

Michigan State Penalties
Tax evasion and tax fraud are very serious crimes that can result in substantial fines and even prison sentences for the convicted. Under Michigan law, failure to file a tax return, submitting a false tax return, payment with intent to defraud, aiding and abetting tax evasion, and filing false returns with intent to defraud are all felonies. If convicted of any of these crimes, you may face up to five years in prison, and fines of up to $5,000, or both.

Additionally, anyone who files a false tax return may also be subject to perjury charges. Perjury is a very serious charge, punishable by up to fifteen years in prison. For state employees who compromise tax returns in any way, or disclose tax information in an unauthorized way, the penalties are an additional five years behind bars and possible fines of up to $5,000, or both.

Willful failure to file a return, pay taxes, or supply information is a misdemeanor punishable by a fine of up to $1000, and up to one year in prison, or both.

Federal Penalties
Federal tax evasion, just like state tax evasion, is a felony. An individual convicted of tax fraud in a federal court could be sentenced to five years in prison, and be required to pay fines of up to $100,000, or both. For a corporation faced with the same charges, the fines are raised to $500,000.Filing a false tax return is punishable by up to $10,000 ($50,000 in the case of corporations), or up to 1 year in prison, or both. Interfering with IRS administrators is also a felony punishable by up to three years in prison, or fines of up to $5000, or both. If the offense is committed only by threat of force, it is punishable by up to $3000, or up to 1 year in prison, or both.

Conspiracy to defraud the government is a felony, but is punishable by up to five years in prison plus fines. It is important to note, however, that federal criminal fine provisions allow for increasing the maximum permissible fines for certain violations up to $250,000 for individuals and $500,000 for corporations.

Willful failure to file a return, supply information, or pay taxes is a misdemeanor resulting in up to one year in jail, a fine up to $25,000 (or $100,000 for corporations), or both.

Civil Penalties for Tax Fraud and Evasion

Not all tax audits revealing tax fraud result in criminal charges. Sometimes the penalties are civil, which means that a person would be required to pay a financial penalty imposed by a government agency as restitution for their wrongdoing. In other words, they would be fined.

Civil sanctions for tax crimes may include a delinquency penalty of up to 25% for failure to file a timely return or pay taxes; an accuracy-related penalty of an added 20% for negligence or disregard of regulations (or up to 30% for negligence with a failure to adequately disclose); and a tax fraud penalty of 75% on the portion of an underpayment.

IRS Whistleblower Program

The IRS Whistleblower Program pays reward money to people who “blow the whistle” on individuals who fail to pay their taxes, or defraud the government through tax fraud. If the IRS uses information provided by a whistleblower, it often awards them up to 30 percent of the additional tax, penalty, and other amounts it collects. This can add up to a substantial amount, which can be a concern for many people accused of tax fraud, as it provides an incentive for others to report them to the government.

The Kronzek Firm Tax Fraud Defense Attorneys

If you, or a loved one are faced with possible tax fraud charges, you are going to need immediate help from skilled professionals who are experienced at navigating the complex world of both the state and federal tax code. Tax law is very complex, and you can’t afford to wait, or settle for less than the best.

We provide free case evaluations, 24 hours a day, seven days a week. If you are looking for an experienced and hardworking attorney to represent you in a tax evasion case, you’ve come to the right place. Call us immediately, any time of day or night. We have someone standing by.

CALL (800) 576-6035

Back to
Top ▲
Aggressive Criminal Defense