Every American should be educated about tax evasion and tax fraud. Tax fraud and tax evasion don’t have to be malicious or even intentional to be considered a crime— accidental tax evasion and fraud are also criminal actions. Because taxes can be confusing, and filing errors are easy to make, it’s important to know about these tax problems so you can educate and protect yourself. First, let’s take a look at the definitions of tax evasion and tax fraud.

Tax Evasion vs Tax Fraud

Many people confuse tax evasion and tax fraud or think that the terms are interchangeable, which is not the case. Tax evasion is when one uses illegal means to avoid paying taxes. Two common types of tax evasion are refusing to pay assessed taxes and failing to file a tax return. Tax fraud, on the other hand, involves lying to the IRS. Tax fraud can be committed in several ways, the most common of which is lying on a tax return and falsifying tax-related documents.

Statute of Limitations

Many crimes have a statute of limitations, which is the amount of time someone has to file charges for a crime. The statute of limitations for a tax audit is usually three years, though this time can vary based on certain circumstances.

One way the statute of limitations can be extended during an investigation relates to the amount of fraud. If during an investigation, the IRS finds that someone has concealed 25% or more of their income, the statute of limitations doubles to six years. The statute time can also be paused if the person being investigated is out of the country or a currently considered a fugitive. In this case, the time can be put on a “hold” until the person is located or returns to the United States.

Defense From Tax Evasion and Tax Fraud Charges

Of course, the best way to avoid being investigated for tax evasion, tax fraud, and many other most common tax problems is to make sure you always file your tax returns carefully, accurately, and on time. Or, even better, have your returns filed by a qualified tax professional. But if you’re worried about possible fraud or evasion issues in your current or past returns, a strong tax defense lawyer is the best way to avoid issues with the IRS. A lawyer specializing in taxes can help you address your tax problems quickly and accurately.

If you’re worried about possible tax fraud or evasion issues, contact a tax expert at Vanguard today to get the best possible tax defense. It’s always best to address any possible tax concerns immediately to make sure you stay out of trouble with the IRS. Having a tax expert review your taxes can give you peace of mind and help get any potential tax issues cleared up as quickly as possible.