Every day Americans get caught up in tax fraud investigations every day. Perhaps you failed to report sales tax for a side business or did not disclose an offshore account on your return. We know that the Internal Revenue Service (IRS) accuses many different types of people of tax fraud. Given the extreme complexity of the tax code, you may or may not have even known you did anything wrong. In fact, most tax proceedings are civil, not criminal, meaning that the IRS or North Carolina Department of Revenue understands that you made an honest mistake or just can’t afford to pay, rather than a willful violation of the law.

If either federal or state law enforcement accuses you of a tax crime, however, you need a criminal attorney who will fight for your rights. When that crime involves tax fraud, you need an attorney who knows the tax laws – state and federal – and can guide you safely through the process.

We can help. At Marcilliat & Mills PLLC, we have a team of highly skilled attorneys with decades of criminal defense experience ready to defend your legal rights.

At our Wilmington office, you will work with attorney Kevin Marcilliat, who has a degree in accounting. He understands both tax law and accounting practices, which can make all the difference in these complex cases.

Understanding Tax Fraud Laws And Penalties In North Carolina

Tax fraud happens anytime someone submits false information on their tax return in order to pay less on their individual income taxes or business taxes. Sometimes people refer to it as tax evasion.

Generally, you must submit the false information intended to be guilty of the crime of tax fraud. An experienced attorney can help you establish a strong defense against the allegations. For example, perhaps any misleading or false claims made on a return were simply an error and not part of a larger fraud scheme.

State And Federal Tax Crimes Can Be Serious.

Tax law can confuse people because you must follow both the North Carolina tax laws as well as the U.S. federal laws regarding taxes. The state of North Carolina lays out tax preparation fraud laws in North Carolina General Statutes §105-130. The federal tax fraud statute is found at 26 U.S.C. § 7201 and makes anyone who “willfully attempts” to evade taxes guilty of a felony.

Whether the charges come from the state or federal government depends upon which taxes were involved. For example, if you are a business owner who did not pay your state sales tax, North Carolina authorities would handle the investigation and potential charges. If you failed to pay your income taxes to both the IRS and the state, you could be charged by both governments.

State Penalties Vs. Federal Penalties.

Penalties for tax fraud and evasion depend upon the type of code violation at issue. Civil and criminal penalties may apply.

Under North Carolina state law, if you fail to pay your taxes, you could face the following monetary penalties:

  • 5 percent of the unpaid amount each month past the due date
  • 10 percent as a late payment penalty
  • 20 percent as a fee for collection assistance

If you are charged with tax fraud, the penalties are even steeper. You can see how quickly these fines add up.

Federal charges carry harsher penalties, especially for fraud. You may face prison time and extremely high fines, compared to state penalties. Federal penalties are broken down as follows, in order of seriousness:

  • Failing to file your return or pay your taxes on time
  • Making a false statement on your return
  • Evading payment of your taxes

Penalties can range from one to five years in jail and fines of $100,000 to $250,000, or up to $500,000 for corporations. You may also face tax liens on your property, damaged credit, and a criminal record.

These are serious consequences and you will want legal help to develop an aggressive defense strategy.

What Is The Legal Process For Tax Fraud Offenses In North Carolina?

Many people wonder how they will know if either the state or federal government is investigating them for tax evasion or fraud. The first step in the legal process for a tax fraud case is for the agency to investigate. A state or federal tax agent may flag your tax return for possible fraud or false claims.

You may receive a notice from the IRS or North Carolina Department of Revenue that you are under audit. Your bank may notify you that tax authorities have requested your bank records.

The sooner you involve your attorney in the process, the stronger your defense will be. You should contact an attorney as soon as you learn you are under investigation for any type of white-collar crime.

How Your Attorney Can Help You In A Federal Investigation Of Tax Evasion

At the federal level, an IRS agent may refer your case to an investigator who conducts a “primary investigation” to determine if they should take the case further. You should not discuss your case with investigators without an attorney present. Giving them the wrong information, even by honest mistake, can worsen your case. Hire the best attorney you can find as soon as you can, and let them handle communications.

If the investigator finds evidence of wrongdoing, they obtain approval from their supervisor to conduct a “subject criminal investigation.” The investigator will gather evidence and talk to witnesses, all to build a case against you. You need your own attorney working on your case, as well.

Once they gather sufficient evidence, the investigation team will consult with federal prosecutors to determine if there is enough evidence to bring charges. The IRS has established many built-in layers of review before proceeding with criminal charges, giving you and your attorney time to address the allegations at an early stage and possibly prevent the IRS from ever filing charges.

Assuming you cannot avoid charges, you need a practiced criminal defense attorney with significant federal defense experience to fight for you. If you are convicted at trial, the court will sentence you accordingly. You may serve a jail sentence, followed by supervised release.

North Carolina Has Its Own Investigation Process

The state’s Department of Revenue Criminal Investigation Division may also pursue its own investigation if they suspect you of some type of state-level tax evasion or fraud scheme, including failure to pay state sales and use taxes. They will often contact you to let you know they are investigating you.

With state-level tax fraud charges, the damage to your reputation and financial costs can be high. Never try to respond to this type of investigation without the assistance of an attorney.

How To Choose A Tax Fraud Defense Lawyer In Wilmington, North Carolina

The sooner you hire a criminal defense attorney to handle your tax fraud case, the better. Consider contacting a Wilmington attorney as soon as you discover that the Internal Revenue Service or North Carolina Department of Revenue is investigating you for fraud charges.

But how do you find the right defense attorney to handle your criminal case? There are several things to look for, depending on the situation you face.

Are You Facing A Federal Investigation Or A State Investigation?

If the IRS or one of its investigative bodies has you under investigation, be sure the attorney you hire has experience with white-collar crimes such as tax fraud. The laws regarding taxes are complicated and ever-changing. You need an attorney who has a strong background in the tax code and experience practicing tax fraud defense.

Beyond simply understanding white-collar crime, you need to make sure you hire an attorney who can actually represent you in federal court. Not every criminal defense attorney is admitted to practice in federal court. This should be a clue that the attorney does not have the experience you want to handle your federal case.

If you only face state charges, admission in federal court may not be an issue at the outset, but keep in mind that federal charges could be on the way if the problem with your tax situation could affect your federal taxes, as well as your state taxes. If the problem is limited to a state-only issue, such as sales tax, you will still want to find an attorney with extensive experience handling that issue.

The Legal Cost For Defending A Tax Fraud Case

Many people worry about how much an attorney will cost them. We understand the concern. Tax cases bring enormous financial pressure to them.

What you must remember is that more than money is at stake. These cases are extremely complex, and not every criminal defense attorney knows how to handle them correctly. A misstep with the IRS can bring even more charges down on you. You need a lawyer who understands the process and can protect you from making a difficult situation even worse.

At Marcilliat & Mills PLLC, our experienced tax fraud attorney, Kevin Marcilliat, can meet with you in a free initial consultation to discuss your situation and what our firm can do for you. After hearing more about your case, we can give you a better idea of what our services may cost.

How To Find The Best Tax Fraud Defense Lawyer For Your Situation In Wilmington, North Carolina

You don’t need just any criminal defense attorney for a tax fraud case. You need more than basic legal advice. You need an attorney who will fight passionately for your rights. You also need an attorney who can wear several hats, such as a strategic negotiator, liaison with the Internal Revenue Service, and fierce legal advocate for your interests. Remember that this person will be your spokesperson to the investigators, prosecutors, and, perhaps, even at trial. Be sure you are comfortable with the attorney’s experience, skills, and demeanor.

When you meet with a potential attorney to discuss your case, you may want to discuss the following issues:

  • Reviewing your tax returns for errors or omissions
  • Reviewing other financial documents that may be relevant to your case
  • Discussing what type of evidence the government may have against you
  • Discussing potential legal strategies the attorney may use in your case
  • Uncovering what gave rise to the investigation of tax evasion or some other tax fraud scheme and how you can avoid similar actions in the future

Remember that time is of the essence. If you think the IRS is investigating you, the longer you wait, the less effective your attorney can be.

Contact A Defense Firm With Significant Tax Fraud Experience

If you are looking for a Wilmington attorney to help you with your tax fraud case, we always welcome your call at Marcilliat & Mills PLLC. Call our Wilmington office at 919-838-6643 or send us an online message to find out how we will fight to protect your legal rights.

Our tax fraud attorney in Wilmington has a degree in accounting, which gives him a deeper understanding of the tax laws and financial issues that surround these cases. Our law firm provides committed representation to people across North Carolina.

At Marcilliat & Mills PLLC., you know you have a competent team of criminal defense professionals working to protect your rights. Call our Wilmington office at 919-838-6643 to schedule an appointment with attorney Kevin Marcilliat right away.

View Our White Paper - The Numbers Count - Fraud and the Federal Sentencing Guidelines