Tax fraud allegations
Tax fraud allegations can arise civilly or criminally, and the two tracks carry very different stakes. At DeVore Law, PLLC, tax fraud matters are handled exclusively by Devin S. DeVore, who represents individuals and businesses facing fraud allegations from the IRS and the Tennessee Department of Revenue.
Understanding which track a case is on, and keeping it from moving to the more serious one, is often the most important early decision in the case.
Tax Fraud in Tennessee — What You Need to Know
Tax fraud generally involves intentionally providing false information to a taxing authority — filing false returns, fabricating deductions, or falsifying records — as distinct from tax evasion, which involves concealing income or assets to avoid paying a known liability. Not all fraud is evasion, though the two frequently overlap.
Civilly, a fraud penalty equal to 75% of the underpayment can be assessed under federal law once the taxing authority proves fraud by clear and convincing evidence, a lower standard than the “beyond a reasonable doubt” standard used in criminal cases. Tennessee imposes a comparable 100% civil penalty on underpayments the commissioner determines were caused by fraud.
Criminally, federal tax fraud under 26 U.S.C. § 7206 carries up to three years in prison, while a criminal fraud referral from the Tennessee Department of Revenue can result in felony charges depending on the tax type and amount involved.
How DeVore Law, PLLC Can Help
Civil vs. Criminal Tax Fraud
Civil Fraud Penalty
A civil finding of fraud does not carry jail time, but it does impose a 75% penalty on top of the underlying tax, and there is no statute of limitations once fraud is established.
Criminal Fraud Charges
Criminal fraud requires proof beyond a reasonable doubt and can result in imprisonment, but the higher burden of proof also gives the defense more room to contest the government’s case.
The Referral Decision
Whether a case stays civil or is referred for criminal investigation often turns on the specific facts an examiner documents early in the audit — which makes early representation valuable.
Common Areas of Focus
Badges of Fraud
Examiners look for indicators like consistent underreporting, false statements, or destroyed records. Rebutting these indicators directly is often more effective than disputing the underlying numbers alone.
Intent vs. Error
A mistaken deduction or a preparer’s error is not fraud, and documenting the honest basis for a position taken on a return is central to the defense.
Amended Returns
Correcting a return before an examiner raises the fraud issue can materially change how the matter is ultimately resolved.
Third-Party and Preparer Fraud
Some clients are implicated by a preparer’s conduct rather than their own, and separating those facts out is critical to limiting personal exposure.
What to Expect — The Defense Process
01
Case Review
We review the audit file, proposed adjustments, and any fraud indicators the examiner has cited to assess how serious the exposure actually is.
02
Response Strategy
We respond to the examiner or investigator directly, addressing the specific badges of fraud raised rather than the return as a whole.
03
Negotiation
Where possible, we work to resolve the matter with a negotiated civil penalty rather than allowing it to escalate to a criminal referral.
04
Litigation or Resolution
If the matter proceeds to charges or a contested penalty assessment, Devin represents clients through appeal, negotiation, or trial.
Why Work With Devin DeVore for Your Tax Fraud Case
Tax fraud defense at DeVore Law, PLLC is not delegated between attorneys. Devin DeVore personally handles every case, offering:
Direct access to your attorney
Experience with both civil tax controversy and criminal defense
Membership in the Tennessee and Knoxville Bar Associations
Discretion in handling sensitive financial matters
Straightforward advice on realistic outcomes
Speak With a Tax Fraud Attorney
If you are facing a civil fraud penalty or a criminal fraud referral, Devin DeVore can review your file and help you understand where the case actually stands.
Contact DeVore Law, PLLC to schedule a consultation and discuss your case with an attorney experienced in both tax and criminal defense.