So maybe you stretched the truth a little. Took a deduction you were not entitled too, or just make up some numbers for expenses and now you think the IRS will not catch you. The IRS uses very sophisticated algorithms to find what you did. They have a ton of data on past criminal cases and can identify the patterns of fraud. You would not be the first person who stretched the truth and the IRS has, over time, used that data to find you.
IRS Fraud Technical Advisers (FTAs)
IRS compliance employees are required to refer potential fraud matters to specialists within the IRS called fraud technical advisers (FTAs). An FTA is an experienced agent trained to assist the compliance employee behind the scenes in developing a plan of action to clearly establish affirmative evidence of fraud. The referral to an FTA is to be made when the compliance employee first sees any indications of fraud. Neither the taxpayer nor the taxpayer’s representative is notified of the referral. The plan of action is intended to develop a firm case for referral to Criminal Investigation before the taxpayer is aware that he or she is being investigated for fraud. Interviewing the taxpayer and/or the tax return preparer is a key component of this plan of action.
The indicators (badges) of fraud are listed by category in Internal Revenue Manual (IRM) Section 18.104.22.168.
They include such conduct as
- omission of income;
- bank deposits from unexplained sources;
- concealment of bank and brokerage accounts;
- concealment of unexplained currency;
- failure to deposit receipts;
- substantial overstatement of deductions;
- false statements of material fact pertaining to an examination;
- failure to file required forms and returns;
- failure to maintain adequate records or maintaining more than one set of books;
- failure to make full disclosure of relevant facts to the accountant, attorney, or return preparer; and many more.
So if you think you “stretched the truth a little” contact us today BEFORE THE IRS DOES and we will amend your tax returns and explain to the IRS it was a mistake and you had no intention of defrauding the IRS of taxes.
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