IRS Criminal Tax Cases Involving Income, Payroll and Business Taxes Are On the Rise

The Internal Revenue Service (IRS) has bolstered its efforts to target individuals and businesses in criminal tax cases in recent weeks. We have seen a rise in cases involving IRS income taxes, IRS payroll taxes, and IRS business taxes—with investigations leading to charges against businesses, business owners, and other individuals. Learn more from New Jersey criminal tax attorney Kevin E. Thorn, Managing Partner of Thorn Law Group:

The IRS’ Current Criminal Enforcement Priorities

Based on what we have seen, the IRS appears to be targeting individual and corporate taxpayers for criminal prosecution in three primary areas. These are:

IRS Income Taxes

Income tax enforcement has long been among the IRS’ top enforcement priorities. However, we have recently seen an increase in criminal enforcement for both individuals and businesses. This includes criminal enforcement in cases involving allegations of:

• Abusive tax shelters
• Abusive use of offshore bank accounts
• Income tax evasion and tax fraud
• Tax preparer fraud
• Tax return fraud

IRS Payroll Taxes

We have recently seen an increase in criminal enforcement in IRS payroll tax cases as well. When businesses misrepresent their payroll figures, this can lead to serious federal criminal allegations. Failing to make payroll trust deposits can lead to criminal allegations as well—and, in these cases, businesses (and, in some cases, their owners) can also face liability for the IRS’ trust fund recovery penalty (TFRP).

IRS Business Taxes

Along with payroll taxes, the IRS is targeting businesses for other federal tax law violations as well. When IRS Criminal Investigation (IRS CI) uncovers evidence of intentional business tax evasion or tax fraud, the U.S. Department of Justice (DOJ) can often pursue criminal charges against both the business and its owners. Some examples of potential allegations include:

• Abusive IRS business tax avoidance schemes
• Failure to accurately report or pay IRS business taxes (including IRS construction business taxes)
• Failure to accurately report or pay IRS excise taxes
• Fraudulently claiming business deductions, credits or exemptions
• Paycheck Protection Program (PPP) and Employee Retention Credit (ERC) fraud

Understanding the Risks Involved in Facing Criminal Tax Allegations

Regardless of the specific allegations involved, facing criminal scrutiny from IRS CI (or criminal prosecution by the DOJ) presents substantial risks. Criminal tax charges can lead to substantial fines for individuals and businesses, and individuals can face federal prison time as well. This, of course, is in addition to liability for any unpaid taxes owed to the IRS. With these risks in mind, if you have concerns about your (or your business’s) potential exposure, you should consult with an experienced IRS and DOJ criminal tax attorney.  

Request a Call with New Jersey Criminal Tax Attorney Kevin E. Thorn

If you need to speak with experienced legal counsel about the risks of facing federal criminal tax charges, we encourage you to contact us promptly. To request a call with New Jersey criminal tax attorney Kevin E. Thorn, Managing Partner of Thorn Law Group, call 201-842-7696 or tell us how we can reach you online now.