IRC CI is Investigating Taxpayers Suspected of COVID-19 Relief Fraud

Articles/News, Offshore Account Update

Posted on August 13, 2021 |

Congress enacted several laws in 2020 in order to provide financial relief to individuals and businesses impacted by the COVID-19 pandemic, and it has continued to provide additional forms of relief in 2021. The Internal Revenue Service (IRS) and other agencies have taken various steps to help mitigate qualifying individuals’ and businesses’ financial strain as well. Many of the federal government’s COVID-19 relief programs have been impacted by widespread fraud, and IRS Criminal Investigation (IRS CI) is among several agencies that are actively targeting those suspected of pandemic-related crimes.

As New Jersey criminal tax lawyer Kevin E. Thorn, Managing Partner of Thorn Law Group, explains, IRS CI is aggressively targeting taxpayers suspected of defrauding COVID-19 relief programs. It has issued dozens of press releases highlighting its efforts in 2021, and it currently shows no signs of slowing down. While many people have put 2020 behind them, IRS CI is still actively investigating crimes committed last year, and it is investigating more recent crimes as well.

What Constitutes COVID-19 Relief Tax Fraud?

IRS CI is involved in investigating several different forms of COVID-19 relief fraud. This includes tax-specific crimes as well as other types of fraud offenses. Some examples of tax crimes related to COVID-19 relief fraud include:

  • Submitting false and fraudulent tax returns in support of applications for Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) program loans.
  • Securing PPP and EIDL loans based on falsified payroll tax records and types of false documentation.
  • Collecting payment under contracts for the delivery of personal protective equipment (PPE), failing to deliver the PPE, and subsequently failing to report the fraudulent income to the IRS.
  • Submitting false information to the IRS in order to secure credits under the Families First Coronavirus Response Act (FFCRA).
  • Falsely certifying to the appropriate use of PPP loan funds in order to secure forgiveness, and subsequently failing to accurately report and pay federal payroll tax and/or income tax liability based on the improper use of the funds.

What are the Penalties for COVID-19 Relief Tax Fraud?

The penalties for COVID-19 relief tax fraud are determined based on the specific statute (or statutes) violated, the amount at issue, and various other factors. Broadly speaking, however, penalties can include federal incarceration, criminal fines and restitution (i.e. repayment of amounts fraudulently obtained). This, of course, is in addition to an obligation to pay any outstanding federal tax liability with interest and applicable tax penalties.

What Should You Do if You Are Under Investigation By IRS CI?

If you are under investigation by IRS CI for COVID-19 relief tax fraud, you need to speak with a New Jersey criminal tax lawyer promptly. You do not have time to wait, and engaging defense counsel to intervene in the investigation right away will give you the best chance to avoid criminal prosecution.

Speak with New Jersey Criminal Tax Lawyer Kevin E. Thorn

Under investigation by IRS CI? Concerned about a possible investigation for COVID-19 relief tax fraud? Call 201-355-8202, email or inquire online to speak with New Jersey criminal tax lawyer Kevin E. Thorn, Managing Partner of Thorn Law Group, in confidence.

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