Civil Fraud penalty Raleigh NC

Typically, an auditor who finds strong evidence of fraud will refer the case to the Internal Revenue Service Criminal Investigation Division for possible criminal prosecution. Keep in mind also that both civil sanctions and criminal prosecution may be imposed.

If during the course of an audit or in any other interaction with the IRS an IRS employee identifies himself as a special agent or as part of the criminal investigation division, you should say absolutely nothing more and immediately contact an attorney qualified to handle criminal tax matters. This is definitely not something you should handle on your own.

Various rules relating to penalties

There are many rules related to penalties contained in the Internal Revenue Code.

Penalties are not deductible business expenses. The Internal Revenue Code will not allow as a trade or business expense "any fine or similar penalty paid to a government for violation of any law."

Under certain circumstances, penalties may not be imposed if the Internal Revenue Service does not send the taxpayer a notice, specifically stating liability and the basis for the liability, within 18 months following the date that is the later of (1) the original due date of the return or (2) the date on which the individual taxpayer timely filed the return.

Frivolous Tax Return penalty