How Tax Fraud Affects Accountants

Posted on in Fraud

Illionois defense attorney,  Illinois criminal defense lawyerWhen most people think of tax fraud, they typically think of a person that tries to avoid paying the proper taxes they owe and then get charged with tax evasion. While that is certainly one type of criminal offense involving taxes, there are others as well. These offenses fall under the umbrella term of tax fraud and many people can be charged with these crimes, including accountants, without even realizing that they engaged in criminal activity.

What Is Tax Fraud?

Tax fraud, in its simplest terms, occurs when a person makes intentional misrepresentations, or false statements, on a tax return, or a person falsifies tax documents. Tax evasion, on the other hand, refers to using illegal means to avoid paying taxes. Tax fraud is governed under 26 U.S.C. 7206 (1) and under this statute, a person may face charges of tax fraud if they:

  • Created and submitted a return, statement, or other legal documents which contains false statements about an important matter,
  • Included false statements in a tax return, statement, or other legal document,
  • Did not believe the statements made on a tax return, statement, or other legal document were true or accurate,
  • Falsely and intentionally created a return, statement, or other legal document with the intention to break the law

Tax fraud is a federal crime and as such, is investigated by the IRS Criminal Investigation Division and the FBI. These cases are prosecuted by the Assistant United States Attorneys from the Department of Justice or one of the U.S. Attorney’s offices throughout the United States.

Why Are Accountants Commonly Charged with Tax Fraud?

It is essential that accountants understand the dangers of becoming entangled in a tax fraud conspiracy. Federal prosecutors prefer to charge federal cases as conspiracies because it allows them to charge several defendants at the same time by stating that each party contributed to the criminal activity.

They can do this because surprisingly, the law does not require that all defendants explicitly agree to the tax fraud. Also, defendants are also not required to know about all aspects of the fraud. The determining factor will rely on the fact of whether all defendants worked together, and that each contributed an overt act to the crime.

Due to the fact that accountants handle so many tax returns, on both a personal and business level, they may submit a tax return that contains false information because that was the information the client provided. When this is the case, as long as the prosecution can prove that the accountant had a part in the fraud, they may face charges.

Our Chicago Federal Criminal Defense Lawyer Is Here to Help

If you are facing charges for tax fraud, even though you did not intend to commit a crime, call our skilled Chicago federal criminal defense lawyer today. At the Law Offices of Hal M. Garfinkel, our attorney understands that not everyone charged is guilty, and he knows the valid defenses for these cases. When you need sound legal advice, call us at 312-629-0669 or contact us online for a free consultation.


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