Tax Fraud Statute of Limitations

Tax Statutes

Tax Fraud is a very serious charge against an individual and can potentially lead to criminal charges filed against you. Two components must be analyzed in dealing with tax fraud statute of limitations—assessment rules and criminal liability.

Tax Assessments for Tax Fraud

Generally speaking, the IRS applies a three year assessment on collecting taxes, according to Internal Revenue Code Section 6501. Typically, this statute of limitation cannot be extended, unless written consent is given before the period ends. However, the three year statute of limitations does not apply in various circumstances. When fraudulent tax returns are filed, a separate statute of limitations on tax fraud applies.

According to I.R.C. Section 6501(c)(1), filing false or fraudulent tax returns removes the tax assessment from the three year statute of limitations for assessment. However, before applying an exception to the statute of limitation on tax fraud, the IRS has the burden to prove that tax fraud was committed.

Criminal Statute of Limitations on Tax Fraud

The Internal Revenue Code also provides the statute of limitations on tax fraud criminal charges. Similar to the assessment rules, criminal prosecution matters regarding violation of the I.R.C has a three year statute of limitations under Section 6531. However, the IRS has carved out a specific six year statute of limitations on tax fraud matters.

A six-year statute of limitations on tax frauds applies to actions such as: willfully attempting to evade or defeat any tax (§7201), willfully failing to pay any tax or file any tax return (§7203), filing a false return (§7206(1)), aiding or abetting the preparation of a false return, claim, or other document (§7206(2)) and submitting false documents (§7207).

Help from a Tax Attorney

It is important to immediately seek legal help to ensure that you are not assessed taxes and penalties that go beyond the statute of limitations, as well endure criminal prosecution outside the statute of limitations on tax fraud. A Criminal Tax Attorney will help ensure that the IRS carries its burden on proving its fraud case, and help you build any possible defense you have.

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