False Statements on Tax Returns
Filing a False Tax Return in Violation of 26 U.S.C. §7206
Under 26 U.S.C. §7206, it is a felony to willfully make false statements on a tax return or willfully aid or assist someone in filing a false tax return. The penalty for violating the statute is a fine of up to $100,000, up to 3 years in prison, or both. A corporation that violates 26 U.S.C. §7206 shall be fined not more than $500,000.
Falsely inflating deductions or under-reporting income on tax returns to reduce or avoid a tax burden are the most common reasons to be charged with making false statements on a tax return. If you have been charged with a tax crime, New York City federal criminal defense attorney Hope Lefeber can help.
Proving False Statements on a Tax Return
To prove that a taxpayer violated 26 U.S.C. §7206, the government must prove, beyond a reasonable doubt, that:
- The taxpayer made and subscribed any return, statement or document, verified under penalties of perjury;
- The statement was false as to a material matter; and
- The maker of the false statement did so knowingly and wilfully and falsely subscribed to the document with the specific intent to violate the law.
To prove the offense of aiding and assisting in making false statements, the government must prove that:
- The defendant helped, assisted, or advised in the preparation of a document to the IRS;
- The document was false as to a material matter; and
- The defendant willfully violated the law.
To find someone guilty of filing a false tax return, the government does not need to prove that a tax was actually due. The focus of crimes committed under 26 U.S.C. §7206 is not only the tax deficiency, but the fact that the defendant provided false information to the IRS. In cases of aiding and assisting in making a false statement, the defendant does not need to have filed or signed the document. The amount of the tax owed is, however, very important, because the amount of the tax loss determines the applicable criminal penalties - i.e. length of imprisonment. Therefore, it is essential to retain an experienced criminal defense attorney when you are facing federal criminal tax charges, in order to properly examine all legal bases to reduce the amount of tax loss that you can be charged with.
Elements of Filing a False Tax Return
Making and Signing False Statements
To be found guilty of filing a false tax return, the taxpayer must actually file the return or another document with the IRS. To qualify as being filed, the document can be submitted electronically, mailed to the IRS, or presented to an IRS agent in person. If you complete a tax return that contains a materially false statement but never actually file it, you cannot be convicted of violating 26 U.S.C. §7206. However, if you present a false tax return for purposes of a loan or for other reasons, you may be charged with other crimes involving false statements and bank fraud.
A person does not need to have personally signed the tax return in order to be convicted. A person can be convicted of filing a false tax return if he/she gave permission for the document to be filed.
Aiding or Assisting in Filing False Statements
Someone charged with aiding or assisting in filing a false statement does not need to have prepared, made, filed, or signed the false document. As long as the defendant knowingly and willfully participated in preparing or supplying information for purposes of preparing a false document, he/she can be convicted of aiding or assisting in making false statements to the IRS.
False as to a Material Matter
To be a punishable offense, false statements must be made as to a material matter. Information is material if it has or is likely to have an effect on the amount of tax due.
Common examples of material information that can result in a conviction for making a false statement on a tax return include falsely stating the source of income, falsely stating, or understating, total income, claiming false dependents on taxes, claiming false deductions or expenses, claiming false tax credit claims, and claiming fraudulent refunds for fictitious people.
Willfully Making a False Statement on a Tax Return
Finally, the government must prove a willful intent to make a false statement on a tax return. The government must show that the taxpayer did not believe the statements to be true and that the statements were made willfully.
Willfulness is more than mere negligence and requires a showing that the person knew of his duty and intentionally violated it. An honest mistake is not enough to prove willfulness and good faith can negate the willfulness element of the crime and result in acquittal.
If the taxpayer signed his name to the document, this can be used to show that he was aware of the information contained in it. However, if the taxpayer relied on a tax professional and can show that he provided the professional with complete and accurate information, this is a complete defense to the crime of making false statements on a tax return.
Willfully Aiding or Assisting in Filing a False Tax Return
A tax preparer can be found guilty, if he/she knowingly uses false information supplied by the client to prepare a false tax return. However, a tax preparer who relied in good faith on information provided by a taxpayer can defeat a charge of aiding and abetting making false statements on a tax return if he/she had no knowledge of the falsity.
To prove willfulness, the government must prove that the tax preparer knew that his actions likely would result in the filing of a false document, or intended for his actions to result in the filing of a false document.
Hope Lefeber Defends People Accused of Making False Statements on Tax Documents
If you are under investigation or have been charged with making a false statement on a tax return in violation of 26 U.S.C. §7206, Hope Lefeber can help.
Ms. Lefeber has extensive experience defending people accused of tax crimes in federal court. She began her career as an enforcement attorney with the Securities and Exchange Commission (SEC), where she learned first-hand how the government prepares and prosecutes white-collar criminal cases. Today, she uses that experience to defend people accused of federal tax crimes.
When you hire Ms. Lefeber, you will find that she is a meticulously prepared advocate who fiercely and tenaciously defends her clients against federal criminal charges. She has extensive experience reviewing and analyzing complex financial records, and has represented accountants, CPAs, businessmen and women, individuals, and corporate taxpayers who are under investigation or have been charged with tax crimes. She is proud to provide them with a vigorous and thorough defense.
To learn more about Hope Lefeber and her record of success, read testimonials from other people she has helped. Then contact Hope Lefeber today to schedule a confidential consultation to discuss your situation.a