Federal Tax Crimes: Conspiracy or Aiding and Abetting Tax Violations
If you are being investigated for an alleged tax crime committed in conjunction with at least one other person, you are likely to be charged with more than just the crime itself. Conspiracy and aiding and abetting tax violations have their own charges and penalties, and the government usually does not need to prove that you succeeded in pulling off the illegal venture – only that you contributed to the effort.
Whether you are being investigated for participating in an identity theft tax fraud ring, or are a CPA concerned that you may be implicated in a client’s tax crime, the criminal tax attorneys at Moskowitz, LLP are here to help you.
Conspiracy involves two or more persons who enter into an agreement to engage in an unlawful activity, followed by an overt act in furtherance of that agreement. If, for example, you conspire with others to commit tax evasion or refund fraud, and any member of the group takes a step to carry out those crimes, you may be charged with conspiracy as well as with the underlying crimes.
Conspiracies to defraud the IRS are prosecuted under the federal conspiracy statute (18 U.S.C. §371). This includes “Klein Conspiracies” aimed at frustrating the functions of the federal government – it is easier for the IRS to claim that you are making it harder for it to assess and collect federal income taxes than it is to prove a criminal tax offense. Note that you can also be charged under state anti-conspiracy laws for hampering the ability of your state government to collect its tax revenue.
Aiding and Abetting
You may be charged with aiding and abetting a tax crime if you assist or participate in a scheme that is carried out by another person, where you knew and intended to cause or assist that person to commit the crime. The other person need not be found guilty.
Many CPAs, lawyers and investment advisors come to us when their clients are under investigation for tax evasion or fraud – involvement in the financial activities of their clients often leads to professional advisors being implicated in the crime as well.
Penalties for conspiracy and aiding and abetting include significant fines and up to five years in federal prison.