What is the Statute of Limitations for Federal Tax Fraud?

What is the Statute of Limitations for Federal Tax Fraud?

There is ample opportunity to make mistakes when you file your taxes yourself. The IRS can launch an investigation against you if the agency suspects any wrongdoing. Of course, some tax filers purposely mislead the IRS regarding the amount they owe or will be getting back.

Whether you lied to the IRS or made a simple mathematical mistake on your taxes, you should know the federal tax statute of limitations. More specifically, you’ll want to know about the IRS statute of limitations for tax fraud and the difference between tax fraud and tax evasion. Keep reading to learn more.

What is Tax Fraud?

Tax fraud is the intentional wrongdoing on a taxpayer’s part, with the specific purpose of evading taxes owed. Tax fraud requires:

  • Tax due and owing
  • Fraudulent intent

Statute of Limitations for Tax Fraud: An Overview

The federal tax statute of limitations describes the time the IRS has to file charges against you if you are suspected of tax fraud. In most cases, the IRS can audit your tax returns up to three years after you file them, which means the tax return statute of limitations is three years. However, if the IRS discovers that you omitted more than 25 percent of your income on your tax return, the federal tax fraud statute of limitations becomes six years.

federal tax statute of limitations

Once you know the basics, it’s time to contact The Law Offices of Kretzer and Volberding P.C. for legal advice on your case.

In some situations, the tax return statute of limitations is even longer than six years. For example, if you try to hide or leave the U.S., the timer on the statute of limitations will stop until you are found. At this point, the timer will start running again. Additionally, if the IRS investigates more than one of your tax returns, the six-year limit might only start from the last return you filed.

Criminal vs. Civil Tax Fraud Statute of Limitations

The federal tax fraud statute of limitations only applies to criminal charges, not civil charges. This means if the IRS plans to charge you for tax fraud in civil court, this agency can go back as far as it wants. Penalties are enforced by prosecution to punish the taxpayer for wrongdoing and serve as a deterrent to other taxpayers.

How far back can a tax investigation go?

The answer is that it depends on the case. Therefore, you need an experienced federal defense lawyer representing you, which you can find at The Law Offices of Kretzer and Volberding P.C.

Tax Fraud vs. Tax Evasion

Another fact to keep in mind is that there is a difference between tax fraud and tax evasion. Committing tax fraud involves lying on your tax return and possibly filing false documents to back up your claims. Tax fraud is a felony charge. On the other hand, tax evasion may involve refusing to file a tax return, which is a misdemeanor charge. It might also refer to refusing to pay taxes once you know what you owe, which is also a felony.

Read more about the difference between tax evasion and tax avoidance.

difference between tax evasion and tax avoidance

More Questions About Tax Fraud? Ask Our Attorneys.

Whether you are being accused of tax fraud or tax evasion, it’s essential to know a few facts. For instance, how long does the IRS statute of limitations last? Once you know the tax fraud or tax evasion statute of limitations, you should contact a tax fraud lawyer who can start working on your case as soon as possible.

After all, you could face hefty fines and even jail time if you’re convicted of tax fraud or tax evasion, so contact the Law Offices of Seth Kretzer today to get the legal counsel you need.

 

Phone: 713-775-3050
Fax: 713-929-2019
Houston, TX 77002
440 Louisiana, Suite 1440