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Tax fraud is a topic that scares many companies and individuals, especially those who have already encountered similar situations. The truth is that because it is such a broad topic, there is misinformation or confusion about the issue, and many people do not even know how to protect themselves from this type of problem.

In today’s article, we will look at the concept of tax fraud, its types, the role of a law firm in resolving these issues, and some basic precautions to take to avoid headaches.

Tax fraud cases can grow rapidly, especially when they involve international financial activities or sanctions. For individuals or entities listed on the ofac sdn list, seeking expert advice is crucial to addressing compliance issues and effectively addressing global regulatory challenges.

What is tax fraud?

Tax fraud is any scheme designed to allow its organizers to obtain or generate illegal benefits by exploiting the legal structure of the tax system to avoid paying their due taxes.

Situations such as falsifying documents, omitting receipts, or manipulating the real value to reduce the amount of taxes are some of the biggest examples of fraud.

Tax fraud is considered a tax crime that affects the public administration and, consequently, society as a whole. It can be criminal in nature and carries penalties ranging from a fine in excess of the tax to five years in prison.

What are the most common types of tax fraud?

Based on the description in the previous topic, you have probably already mentioned several examples of tax fraud, right?

By far the most common of these is tax evasion, which consists of using devices that prevent an individual or company from paying all taxes owed to the government. Other examples, such as forgery, collusion between companies, and even some types of tax crimes that favor government officials, are also included in the list of tax fraud.

It is also important not to confuse tax evasion, a fairly common type of tax fraud in jurisprudence, with tax non-payment. While tax evasion is a crime, non-payment is simply a condition of payment, since you did not evade paying the amount owed - you simply did not pay it on time.

What is the role of a tax fraud lawyer?

The work of a tax fraud lawyer can be divided by the types of consequences that arise for each specific situation, as well as the client’s current situation.

This is because the work of a lawyer in this area can range from preventive issues that allow avoiding tax crimes to defending against fraud charges. Among the main areas of activity of these professionals are:

Lawsuit defense

Lawsuit defense is the most “combat” form of action. These are those whose clients are already undergoing some legal process related to tax crimes.

In this case, the law firm acts comprehensively in tax law to demonstrate the absence or lesser severity of the offense, as well as under a criminal bias to avoid more harmful penalties for the client.

Compliance strategies

Compliance strategies, also known as integrity programs or compliance programs, are designed to ensure that the entire company acts in accordance with established rules to prevent fraud.

This is especially important for companies with teams that are developing, since the company will be responsible for the effectiveness of the work of all its representatives. From this perspective, the compliance strategy aims to create security and maintain the ongoing integrity of the company's operations.

Business and tax protection

Business and tax protection is another step in this logic of compliance. It involves constant and preventive monitoring of the situation so that not only compliance is regularly practiced in the reality of the company, but also seeks to protect everyone from the possible negative consequences of events that occur beyond their control.

In the case of tax fraud, protection protects not only the criminal consequences, but also the financial and operational stability of the company, so that it is not too affected by a possible lawsuit.

What are the possible consequences of tax crimes?

The consequences of tax crimes vary depending on the severity of the offense committed. For less serious cases of fraud, the fine is usually monetary, that is, financial. In these cases, the fine is applied based on the estimated value of the fraud, which can be multiplied by the initial value up to several times.

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