Tax Fraud Lawyer

Tax fraud is the crime of willfully deceiving the government about what you owe, by evading taxes, filing a false return, hiding income, or failing to file, and a federal tax fraud case can bring years in prison, enormous fines, and full repayment with penalties and interest. These cases are built by IRS Criminal Investigation, often begin as a civil audit before turning criminal, and turn on one demanding element: willfulness. Because the government must prove you acted willfully rather than by mistake, tax fraud is frequently defensible, but only with the right lawyer and an early start. If you are under investigation or charged in New York City, an experienced tax fraud attorney should be your first call.

Varghese & Associates, P.C. is a federal criminal defense firm on Wall Street, in the heart of the Southern District of New York. Tax fraud is a core part of our federal fraud defense practice, and the firm is led by Vinoo Varghese, a former prosecutor and one of the most recognized criminal defense attorneys in the country. Our tax fraud attorneys handle these cases in house, from the first IRS contact or audit through investigation, indictment, trial, sentencing, and appeal. Matters are not routed out to other firms.

Call now for a confidential consultation with a New York City tax fraud lawyer. The earlier our tax fraud defense lawyers are involved, the more they can do.

What Is Tax Fraud?

Tax fraud is the willful attempt to evade or defeat a tax, or to deceive the government about income, deductions, or tax owed, through acts like underreporting income, claiming false deductions, filing a false return, or failing to file at all. The defining element of every federal tax crime is willfulness, meaning the voluntary, intentional violation of a known legal duty. An honest mistake, a good-faith misunderstanding of the tax law, or reasonable reliance on an accountant is not tax fraud. That willfulness requirement is the single most important battleground in these cases, and it is where an experienced tax fraud attorney concentrates the defense.

What Is the Difference Between Tax Fraud and Tax Evasion?

Tax evasion is the most serious type of tax fraud, the willful attempt to evade paying a tax that is owed, while tax fraud is the broader term that also covers filing false returns, failing to file, and failing to pay over withheld taxes. Tax evasion under 26 U.S.C. § 7201 is a felony carrying up to five years per count, and it requires an affirmative act to evade, such as hiding income or assets. Other tax crimes, like filing a false return or failing to file, are charged under different statutes with their own penalties. A tax evasion lawyer and a tax fraud attorney defend the same core issue: whether the government can prove you acted willfully.

What Are Examples of Tax Fraud?

Common examples of tax fraud include underreporting or hiding income, claiming false or inflated deductions, keeping two sets of books, using offshore accounts to conceal money, failing to file returns, failing to pay over payroll taxes, and filing false refund claims. Federal tax cases often begin with a civil audit, a whistleblower, or a data match that flags a discrepancy, and they can turn criminal when IRS Criminal Investigation sees signs of willful deception. In practice, tax fraud is frequently paired with other charges, such as wire fraud, money laundering, and conspiracy to defraud the United States, stacking counts to increase both the pressure and the potential sentence.

Tax Fraud and Related Charges, and the Statutes Behind Them

Federal tax crimes are charged under a group of statutes in the Internal Revenue Code and Title 18, and understanding which one applies matters, because the elements and penalties differ. The charges most often filed in tax cases include:

• Tax evasion (26 U.S.C. § 7201)
• Filing a false return or making a false statement under penalty of perjury (26 U.S.C. § 7206(1))
• Aiding or assisting in the preparation of a false return (26 U.S.C. § 7206(2))
• Willful failure to file a return, supply information, or pay tax (26 U.S.C. § 7203)
• Failure to collect or pay over employment taxes (26 U.S.C. § 7202)
• Conspiracy to defraud the United States, the Klein conspiracy (18 U.S.C. § 371)
• False, fictitious, or fraudulent refund claims (18 U.S.C. § 287)
• Failure to report foreign bank accounts, the FBAR requirement (31 U.S.C. § 5314)

How Do Federal Tax Investigations Work?

Criminal tax cases are investigated by IRS Criminal Investigation and prosecuted by the Department of Justice Tax Division and the U.S. Attorney's Office, and they often start as a civil audit that quietly turns criminal when the auditor spots signs of fraud. When an audit is referred for criminal investigation, special agents build a case using bank records, returns, third-party witnesses, and your own statements. A key warning sign is when a revenue agent goes silent or IRS special agents make contact. That moment is the most valuable time to bring in a tax fraud attorney, because early intervention can sometimes keep a case civil or head off charges before an indictment.

What Are the Penalties for Tax Fraud?

Tax evasion carries up to five years in federal prison and a fine of up to $100,000 for an individual per count, filing a false return carries up to three years, and failure to file is a misdemeanor carrying up to one year, with every conviction also requiring repayment of the tax plus civil penalties and interest. Because each tax year and each false filing can be charged as a separate count, exposure can multiply quickly. On top of prison time and fines, a tax fraud conviction brings restitution to the IRS and can trigger significant civil fraud penalties. The severity of these consequences is exactly why an experienced tax fraud attorney should be involved as early as possible.

How Does Sentencing Work in a Tax Fraud Case?

Federal tax fraud sentences are calculated under the United States Sentencing Guidelines, where the single biggest driver is the tax loss, meaning the amount of tax the government says was not paid. Because tax loss controls so much of the range, one of the most valuable fights in a tax case is over how that figure is calculated, and the government's number is often inflated by disallowing legitimate deductions or overstating unreported income. Our tax fraud attorneys challenge the tax-loss calculation, contest enhancements for sophisticated means, present detailed mitigation, and argue for a sentence below the guideline range, including for a non-custodial sentence where appropriate.

What Are the Defenses to a Tax Fraud Charge?

Tax fraud turns on willfulness, and that is where the defenses concentrate. Every case is different, but the strategies our tax fraud lawyers commonly use include:

• No willfulness. Every tax crime requires a voluntary, intentional violation of a known legal duty. A good-faith misunderstanding of the tax law, even an unreasonable one, can defeat the willfulness element.
• Good-faith reliance on a professional. Reasonable reliance on an accountant or tax preparer, with full disclosure of the facts, can negate the intent the government must prove.
• Honest mistake or negligence. Errors, sloppy recordkeeping, or negligence are not crimes; the government must prove intentional deception.
• No tax due or a smaller tax due. Disputing the government's tax-loss figure can undercut both the charge and the sentence.
• Attacking the government's proof of unreported income. Challenging the methods, such as net-worth or bank-deposits analysis, the government uses to reconstruct income.
• Suppression. Where records or statements were obtained unlawfully, our attorneys move to suppress under the Fourth and Fifth Amendments.

What Should You Do If You Are Under Investigation for Tax Fraud?

If you learn you are under investigation for tax fraud, or IRS special agents contact you, do not talk to them, do not turn over documents without counsel, do not amend returns on your own, and do not alter or destroy any records. Call a tax fraud attorney immediately. Anything you say to IRS agents or your own accountant can be used against you, and filing amended returns or destroying records after an investigation begins can make things far worse. You have the right to remain silent and the right to counsel. Note that the accountant-client privilege does not protect you in a criminal case, so involve a lawyer before speaking with anyone. Preserve everything, say nothing without counsel, and let your lawyer engage the IRS.

How Our Tax Fraud Attorneys Can Help You

Our tax fraud defense lawyers defend these cases at every stage, and they look for the earliest possible point at which the case can be won or shrunk:

• Early intervention. Stepping in during an audit or investigation to keep a matter civil where possible, handling IRS contact, and negotiating with DOJ Tax and the U.S. Attorney's Office to seek a declination or reduced charges before an indictment is filed.
• Protecting privilege. Using a Kovel arrangement to bring accountants under the attorney-client privilege where appropriate.
• Investigation and evidence challenges. Independently reconstructing the finances, testing the government's income and tax-loss methods, and filing suppression motions where evidence was unlawfully obtained.
• Motion practice and trial. Moving to dismiss defective counts, limiting the government's proof, and trying cases before federal judges and juries when trial is the right path.
• Sentencing and mitigation. Challenging the tax-loss calculation, arguing for variances, and defending against restitution and penalties.
• Appeals and post-conviction relief. Direct appeals and post-conviction motions where the law and the record support them.

Is Tax Fraud a Felony?

Most tax fraud crimes are felonies, including tax evasion and filing a false return, though willful failure to file is a misdemeanor. Tax evasion under 26 U.S.C. § 7201 and filing a false return under 26 U.S.C. § 7206 are felonies carrying up to five and three years in prison respectively, while failure to file under 26 U.S.C. § 7203 is a misdemeanor. Even a misdemeanor tax conviction carries jail exposure, a criminal record, and repayment with penalties, which is why every tax fraud allegation should be treated as serious from the start.

Can a Tax Fraud Charge Be Dismissed or Kept Civil?

Yes. A tax matter can sometimes be kept civil, or a criminal charge dismissed or reduced, through early intervention that heads off a criminal referral, a motion to dismiss a defective charge, a successful suppression motion, or negotiation with DOJ Tax. Because tax cases hinge on proving willfulness and an accurate tax loss, they are often more defensible than they first appear. Nothing is guaranteed, but the outcome is far better when a tax fraud attorney is involved early, ideally while the matter is still an audit rather than a criminal case.

How Much Does It Cost to Hire a Tax Fraud Lawyer in New York City?

The cost of a tax fraud lawyer in New York City depends on the number of tax years and counts at issue, the complexity of the finances, whether the matter is still civil or already criminal, and whether it resolves before or goes to trial. Tax cases involve extensive record reconstruction, forensic accounting, and detailed motion practice, so they require real work. Our tax fraud attorneys are transparent about fees from the first conversation and structure the representation to fit the matter. Given the prison exposure, restitution, and penalties at stake, the more important question is usually what an inadequate defense can cost you.

A Tax Fraud Attorney the National Media Turns To

When the biggest federal financial cases in the country are in the news, networks and newspapers call Vinoo Varghese to explain what is really happening in the courtroom. That is the same judgment and credibility our tax fraud attorneys bring to your case.

Vinoo Varghese has provided legal analysis and commentary for CBS News, Fox News, Fox Business, CNN, MSNBC, Court TV, HLN, BBC, Inside Edition, i24 News, Sky News Arabia, and Nancy Grace's Crime Stories, and has hosted true-crime legal analysis for Vanity Fair. He has been quoted as a legal authority by The New York Times, The Wall Street Journal, the New York Law Journal, Law360, the New York Daily News, and the New York Post. A former prosecutor from the Brooklyn District Attorney's Office, he is a nine-time National Trial Lawyers Top 100 honoree, an eight-time New York Metro Super Lawyer, rated AV Preeminent by Martindale-Hubbell, and has served on the visiting faculty of Harvard Law School's Trial Advocacy Workshop. He has obtained a new trial and ultimately an acquittal in a federal tax-fraud case after exposing prosecutorial misconduct.

Contact a New York City Tax Fraud Lawyer Now

If you are under investigation, are being audited with signs it is turning criminal, have been contacted by IRS special agents, or have been charged with tax fraud anywhere in New York City, do not wait and do not talk to anyone but your lawyer. Tax fraud is part of our broader federal white-collar defense practice, and a tax fraud attorney who has stood in the courtroom and tried the cases can change what happens next.

Call Varghese & Associates, P.C. for a confidential consultation. Our office is located at 2 Wall Street, Suite 310, New York, NY 10005, steps from the federal courthouses of the Southern District of New York.