From the Tax Law Offices of David W. Klasing - What Factors Can Trigger a High-Risk Egg Shell Audit / Criminal Tax Investigation?

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Tax Law Offices of David W. Klasing, PC

Aug 25, 2020, 06:37 ET

IRVINE, Calif., Aug. 25, 2020 /PRNewswire/ -- If serious tax fraud becomes suspected by a federal or state taxing authority an eggshell audit or even a criminal tax investigation could result in criminal tax charges eventually being sought. More often than not, audits come about as a result of an agent running statistical diagnostic software applied to all filed returns, whom notices something suspicious on the returns you filed or failed to file in some cases. As such, certain warning signs could make it far more likely that you are going to face severe scrutiny that could lead to potentially life altering headaches for you.

During any civil audit, the auditor may discover badges of fraud in your fact pattern and request to be assisted by someone known as a fraud technical advisor (FTA). The FTA's sole role is to discover, develop and analyze any "badges of fraud," in your fact pattern that indicate tax fraud might have occurred, and possibly refer your audit over to the criminal investigation (CI) function of the IRS for a closer look. If CI chooses to take on your case and completes an investigation, they will hand your matter off to the Tax Section of the U.S. Department of Justice for criminal tax prosecution. CI, alone, has a 90% + conviction rate if they choose to investigate.

High risk audits are also more common in cash-intensive industries like restaurants, bars, laundry matts, and hospitality businesses. Of course, failing to file your tax returns at all is also highly likely to attract negative attention toward you and can be very risky if Spies factors are identified. In terms of criminal tax investigations specifically, being involved in any of the IRS's dirty dozen tax fraud schemes or using something like a micro captive insurance company to illegally evade paying what you rightfully owe is highly likely to get an FTA's attention and potentially move things from a civil audit to an egg shell audit or a criminal tax investigation.

At the Tax Law Offices of David W. Klasing, our skilled Tax Lawyers and CPAs can help you avoid prosecution by filing true accurate and complete returns in the first place or by entering you into a voluntary disclosure if you are willing to knock on the government's door before they come to knock on yours. If an eggshell audit or criminal tax investigation is already underway, we will strive for a civil resolution of your case that minimizes the amount of additional tax penalties and interest you are assessed and avoids criminal tax charges from being pursued. If that is not possible because of the facts and circumstances of your case, we will do damage control as best we can to preserve your liberty to the extent possible.

Call 800-681-1295 to schedule a reduced rate initial consultation or book ONLINE today.

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Public Contact: Dave Klasing Esq. M.S.-Tax CPA, [email protected]

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