Voluntary Disclosure: What to do if your tax advisor is under criminal investigation.

Voluntary Disclosure: What to do if your tax advisor is under criminal investigation.

In most cases, individuals and businesses hire a tax advisor. These advisors file their taxes and ensure that they are up-to-date on the tax front. While it is essential for your tax advisors to help you with your tax filings. The advisor should have a clear tax record themselves. Otherwise, in light of the latest rules, the United States Internal Revenue Service (IRS) might conduct an investigation to hold your tax advisor accountable for their actions. Should you make a voluntary disclosure if you think your tax advisor may be under criminal investigation? Continue reading to learn more.

Should you Disclose the Improprieties of Your Suspected Tax Advisor?

If you suspect that your tax advisor is facing a criminal investigation regarding their tax offenses. You must ensure that you are safe from the ongoing investigation. With that, you need to make a conscious effort to take the necessary precautions. To help unveil the offender and save yourself in the process. This practice may include disclosing all suspicious activities regarding tax filings that might come in handy in the ongoing investigation.

Why is it Essential to Disclose the Improprieties of a Criminal to the IRS?

The IRS has introduced the Voluntary Disclosure Practice to ensure that every taxpayer who is an alleged tax offender or involved in a tax crime should have one chance to showcase their compliance with the IRS before being prosecuted. All the criminal bodies must coordinate and cooperate with the IRS Criminal Investigation Department to determine the amount they owe. So, they get a chance to pay the penalty. In case of persisting negligence, the offender will have to face criminal prosecution.

How to Disclose the Improprieties of a Criminal to the IRS?

The route to approach the IRS can be pretty challenging – something you cannot pursue on your own. Suppose you plan on disclosing the improprieties of a tax offender. In that case, you need to approach a Criminal Tax Defense Attorney, without whom it is nearly impossible for you to move forward.

Approaching a licensed attorney is the first part of the complicated process of filing a complaint to the IRS. It is essential to move forward with the help of a licensed attorney because voluntary disclosure requires legalities that commoners aren’t familiar with. Therefore, you need to have a legal body by your side to walk you through the process.

Using a tax advisor who is under investigation can create a myriad of problems for you. This seemingly small detail can drag you to the course of criminal prosecution. Where you could face numerous potential tax issues. Even if these tax offenses did not involve you.

When Should You Make a Voluntary Disclosure?

In most cases, voluntary disclosures are only effective when carried out in a timely fashion. If you are too late, your case might be ineffective, and you will be liable to legal prosecution. As soon as you get a notice issued by the IRS, you should immediately make a voluntary disclosure. And state the facts about your source of income, illegal means, and the amount you owe to the government.

Furthermore, the IRS could receive a tip against the offender. They might issue a search warrant against the suspected taxpayer. If the IRS acquires any information regarding a tax crime, the offender should immediately make a voluntary disclosure. Thus, ensuring that they cover the differences, and receive the required information.

n certain cases, the suspected taxpayer directly faces an audit. The IRS opens an audit to ensure that the tax offender goes through prosecution for withholding the required information, covering the grounds of their illegal income, and not being compliant with the IRS.

Be mindful that certain instances of voluntary disclosures might go in vain because of a delayed response. Therefore, you should react quickly and make a voluntary disclosure to save yourself from legal prosecution. However, making a voluntary disclosure does not necessarily mean that you are 100% safe. In fact, there are instances when it is completely futile to make the disclosure.

Should You Be Worried About a Criminal Investigation if it Concerns Your Tax Advisor?

If your tax advisor is under the scrutiny of the IRS, due to criminal activities, you might have to be vigilant. The IRS will most likely approach you and hold you responsible for your unpaid taxes. No matter how you choose to conduct your business with your tax advisor, the IRS will demand the penalty with interest on your part.

If things get ugly, you might have to go through a criminal investigation yourself in the form of an eggshell audit. You will have to face severe consequences if they find you guilty due to involvement in a tax offense or a tax conspiracy with your tax advisor.

Final Word

The United States Internal Revenue Service (IRS) has really stepped up its game, where it is now going after every tax offender, no matter how powerful or influential the business entity is. It has been introducing new means and innovative avenues to ensure that every law-abiding citizen is served justice. The powerful commodities should be held accountable for their illegal businesses and tax withholdings.

Suppose you suspect that your tax advisor is under investigation, and you might be the next target. In that case, you should immediately make a voluntary disclosure. Thus, ensuring your cooperation with the IRS and staying compliant with its rules. Otherwise, you will have to face legal prosecution along with your tax advisor.

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