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  • Daniel Rodriguez

Is the IRS Going to be Tougher on Tax Evasion This Year (2021)?

The years 2020 and 2021 were very unusual, to say the least. Because of the COVID-19 pandemic, many Americans lost their jobs. Many people made up their lost income with new jobs, unemployment, or public assistance. Tax situations for many people filing in 2021 are going to be unusual. Because of these unique circumstances, the IRS will be examining your taxes especially closely this year.

For people filing their taxes in 2021, the IRS will harshly scrutinize any suspicious activity. Some people filing their taxes may be unfamiliar with reporting different forms of income they may have had this past year. Other people may intentionally seek to take advantage of COVID-19 tax breaks even though they are not eligible. If you find yourself in a complicated tax situation this year, you should speak to a tax lawyer before filing.

If you are filing taxes this year for yourself or your business, you will need to pay extra close attention to your tax returns. The IRS is on the lookout for fraud, and you do not want to make any unintentional mistakes. To schedule a legal consultation with one of our California tax attorneys, call the NewPoint Law Group, LLP at 800-358-0305.

Why the IRS Will be Tougher on Taxes in 2021

The years 2020 and 2021 have been very unusual as far as finances go for a lot of people. COVID-19 has had a major impact on the economy. Many lost their jobs or had to find new jobs. So, filing for taxes will look very different for a lot of people. Many people were left in dire financial situations, so they may be looking for tax breaks to take advantage of. There are also many people who are willing to commit fraud or take advantage of people in need.

As such, the IRS will be on the lookout for any signs of tax evasion or fraud. The IRS will be looking for fraud not just from individuals filing their taxes, but also from businesses and tax preparers. While the IRS is constantly checking for potential fraud during tax season, certain unique tax situations may make it easier for people to commit fraud or try to evade paying taxes.

The past year saw many people unemployed. With any disaster, there will always be people looking to take advantage of the situation for their personal gain. Fraud involving misreporting of income, hidden assets, and property will all be looked at. Similarly, the IRS will be checking for scams targeting vulnerable taxpayers. If you need help filing your taxes, contact our Sacramento tax lawyers for assistance.

Types of Fraud or Ta Evasion the IRS Will be Looking For in 2021

The IRS is always checking for suspicious tax returns, but this year they will be particularly vigilant. Below are some, but not necessarily all, of the things the IRS will be checking for. If you think any of these situations, or a situation not mentioned, apply to you, speak to a lawyer right away. Our Modesto, CA tax attorneys can help you figure out the correct way to file your taxes and avoid making a serious mistake.

Filing fraudulent returns

The IRS will be looking for fraudulent returns from both individual taxpayers and tax preparers. It is not unusual for a taxpayer to fudge the numbers on their tax return in the hopes of avoiding paying taxes or getting a larger refund. Sometimes, this act of fraud is facilitated by professional tax preparers. Keep in mind, both the taxpayer and the preparer could face legal consequences if found out by the IRS. Possible fraud could include under-reporting income or failing to report certain assets like offshore accounts.

Taxes Involving Property

Some taxpayers can take advantage of tax deductions for conservation easements on their property. There are a number of ways in which a taxpayer could use these easements to commit tax fraud. For example, if you took an overly large deduction for an easement, claimed an easement deduction you are not eligible for, developed a property inconsistent with an easement, or claimed an easement that does not legally exist.

COVID019 Relief

This past year was very scary for everybody because of the COVID-19 pandemic. As the virus spread, many states issued lockdowns and stay-at-home orders to keep people safe. Unfortunately, the lockdowns took a harsh economic toll on many people. Depending on your situation, you may be able to take advantage of certain tax relief scenarios related to COVID-19. However, the IRS will be on the lookout for eligible taxpayers falsely claiming these tax breaks.

Unusual Forms of Income

As so many people lost their jobs, many Americans found themselves scrambling to make ends meet and regain lost income. A lot of people had to make money in non-traditional ways that may lead to unusual tax situations. You must report all income no matter what. This includes income from gambling, cryptocurrency, and the newly legalized cannabis industry. This also includes income made from “gig-work,” where you might be paid in cash for odd jobs at irregular intervals.

Business Fraud

Many businesses were hit hard by the economic downturn of the past year. The IRS will be looking for any fraud related to taxes for businesses. This includes large corporate entities and small business owners.

Healthcare Fraud

COVID-19 created a worldwide health crisis. Healthcare providers must provide tax information related to billing and payments received. The IRS will be checking for healthcare fraud, such as staged accidents or healthcare treatment that is reported but never actually given. Because COVID-19 so heavily impacted health care providers, they should be cautious when filing taxes this year.

How Our Team of Tax Lawyers Can Help You

Our team of Elk Grove tax attorneys can help you prepare and file your taxes so that you avoid any unintentional fraud. Doing taxes is confusing even at the best of times and mistakes are not uncommon. Our tax attorneys are prepared to review your case and help you file your taxes correctly. You may also find yourself in a dispute with the IRS over your taxes. In such a case, we can advocate on your behalf and clear your name of any wrongdoing.

It is also possible that you committed tax fraud or evasion in the past. For some, this fraud may have been intentional, while it was due to accidental oversights for others. No matter the case, we can help you amend old taxes and correct any fraudulent acts. In doing so, we may come up against the possibility of civil or even criminal penalties. Our tax attorneys can help you correct your past mistakes while avoiding penalties if possible.

Call Our California Tax Lawyers for a Legal Consultation Today

If you are filing taxes this year for yourself, a business, or someone else as a preparer, you should consider speaking to our California tax lawyers first. We can help you identify any problem areas that need addressing and avoid tax mistakes. For a consultation, call the NewPoint Law Group, LLP at 800-358-0305.

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