IRS Civil Investigations for Fraud in Richmond

The IRS may conduct both civil and criminal investigations into fraud, depending on the severity of the case and the value of the funds involved. Those investigations can trigger a great deal of stress in the individuals facing them, even in cases where those will include primarily civil penalties. Understanding IRS civil investigations for fraud in Richmond can help you understand what to expect and what may come next in the process. Our tax crime attorneys are here to help.

Examples of IRS Civil Investigations for Fraud

IRS civil investigations in Richmond for fraud can be triggered in a variety of circumstances. Those may include:

• Intentionally underreporting income: The person under investigation deliberately claims less income than they actually made
• Claiming false deductions: The person under investigation claimed deductions for which they did not qualify
• Creating false documents: Generating false records, books, or invoices to decrease income or show fake expenses
• Claiming ineligible credits: Claiming credits that the taxpayer does not qualify for
• Waiting to file: Willfully failing to file tax returns on time

In many cases, inconsistencies in tax reporting can trigger an IRS civil fraud investigation. However, other factors, including reports from other individuals or entities about possible fraud, can serve to trigger those investigations.

Penalties for IRS Civil Issues

The penalties for IRS civil violations, unlike criminal violations, generally involve monetary restitution. The IRS may assess specific fines based on the type of issue and its value. In addition, taxpayers may have to pay assessed interest amounts on any funds they failed to pay on time. For example, if a taxpayer underpays deliberately or negligently, the penalty may be the greater of 10% of the required tax or $5,000. When the underpayment is due to fraud, the assessed penalty may be up to 75% of the underpayment amount.

In the case of some penalties and fines, interest charges will increase each month until the amount is paid in full.

The IRS Civil Investigation Process

IRS civil investigations for fraud in Richmond may involve a complex process that looks at multiple financial documents and information. They may include:

• A look at personal banking records, income, business books, and bank accounts
• Evaluation of the tax return document, including a review of where and how filing took place
• In-person interviews and reviews of the information provided

In many cases, IRS investigations will take place through the mail. The accused may never sit down with a representative in person to go over those documents. However, in other cases, the investigation may require in-person interviews.

Civil investigations may look different from criminal investigations, which often involve much more substantial monetary amounts and significant fraud. The IRS will often hold off on assessing civil penalties until a criminal case resolves in order to avoid interference with that criminal investigation.

Contact an Attorney to Discuss IRS Civil Investigations for Fraud in Richmond

IRS civil investigations for fraud in Richmond can trigger immense stress and frustration, especially if you did your due diligence and made sure that your tax documentation was as accurate as possible. At Whiteford Tax Defense, we help our clients understand their rights, the investigation process, and how to navigate penalties and repayments as effectively as possible. Contact us to discuss your pending civil IRS investigation, its possible impact, and how you can protect your rights.