What are the most common reasons for an IRS tax audit?

The IRS typically audits returns that show unusually high deductions, complex transactions such as those involving foreign accounts or entities, and discrepancies between reported income and third-party information reports.

Can I negotiate with the IRS to reduce my tax debt?

Yes, through an Offer in Compromise program, you may be able to settle your tax debts for less than the full amount if certain criteria are met, such as proving payment in full would cause financial hardship.

What is the statute of limitations on IRS collections?

The IRS generally has ten years from the assessment date to collect taxes owed. However, this period can be extended if you file for bankruptcy or request an installment agreement and other circumstances that suspend the collection statute.

IRS Tax Defense

Understanding and Defending Against IRS Charges of Tax Structuring

In the realm of tax law, one area that frequently catches individuals off guard is tax structuring. Under 31 USC 5322, this practice involves breaking large financial transactions into smaller ones to avoid triggering reporting requirements under federal regulations. Tax structuring can occur when a taxpayer divides their cash deposits into amounts less than $10,000 or engages in similar avoidance tactics. The intent behind such actions is key; it must be shown that the individual knowingly structured their finances to evade filing Currency Transaction Reports (CTRs) with financial institutions. Prosecutors often scrutinize patterns of behavior and communication for evidence of criminal intent. Defending against tax structuring charges requires a nuanced understanding of both the regulatory environment and the specific facts of your case. In my experience, the IRS Criminal Investigation division (IRS-CI) tends to collaborate closely with the DOJ Tax Division and FinCEN to build robust cases based on meticulous financial records analysis. As such, it's crucial for defense attorneys to thoroughly investigate not only the client’s bank statements but also their personal communications and business transactions leading up to any alleged violations. A successful tax structuring defense hinges on demonstrating a lack of intent or challenging the government's ability to prove beyond reasonable doubt that your actions were designed to evade reporting requirements. This can involve showing that legitimate financial needs necessitated smaller deposit amounts, thereby negating the inference of criminal intent. Additionally, exploring potential procedural irregularities in how the case was initiated and handled by law enforcement agencies is also a viable strategy.

Identifying patterns of behavior indicative of tax structuring.

Demonstrating a lack of intent to evade reporting requirements.

Challenging procedural aspects of the case initiation and handling.

Former Federal Prosecutor Insight

In my tenure as a federal prosecutor, I've seen countless cases where tax structuring allegations were at the heart of an investigation. It's crucial to understand that these charges often stem from a broader IRS probe into potential money laundering or other financial crimes. The defense needs to dissect each transaction carefully and challenge the government’s narrative about intent.