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The IRS has various timelines to recover missing funds

In many cases, the Internal Revenue Service has three years to audit a tax return. However, if a Tennessee resident fails to report 25 percent or more of his or her income, the government gets six years to audit the return. Generally speaking, this is considered a criminal matter, and the IRS is held to the beyond a reasonable doubt standard of proof.

Of course, there are exceptions to the rules that give the government unlimited amounts of time to audit a return. These exceptions involve a person who filed a false return or no return at all. Another exception applies to those who tried to willfully evade paying income taxes. This is considered to be a civil matter, and the IRS is held to a lower standard of proof to prove such cases.

As a general rule, the IRS is required to go after taxpayers when there is evidence of tax fraud. This is true even if the fraud is related to a gift or estate tax filing. In some cases, whistleblowers provide information that leads to recovery for the government. In such a scenario, an individual could be entitled to up to 30 percent of the amount recovered. Whistleblowers have been paid roughly $499 million since 2007.

Anyone who is charged with defrauding the government may need to hire an attorney. Legal counsel could create a defense to the charge that prevents some or all of the penalties associated with it. In many cases, an attorney can negotiate a resolution that will be in the best interests of the client.

State Bar of Georgia
TBA | Tennessee Bar Association
CBA | Chattanooga Bar Association
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