Many Americans feel that having foreign bank accounts is a “tax haven” to protect his or her own money from being reported to the IRS during filing tax season or feel that foreign bank secrecy policies can help them hide financial information from the US government. There are a number of foreign banks such as the Swiss Bank, offers secrecy and “tax havens” but it does not protect clients all the times.

Under the Bank Secrecy Act (BSA) of 1970, foreign institutions can cooperate with the US government to provide foreign bank account information if the US government has legitimate reasons, such as criminal investigations.

Some common criminal investigations include Money Laundering, Tax Evasion, Mail Fraud, Wire Fraud, Black market operations and many more. According to US Department of Treasury, Switzerland and the United States cooperated on an agreement in an effort to fight against these illicit activities in 2003. Swiss banks will turn over information if it finds any type of suspicious fraudulent activities.

With cooperation, financial institutions usually provide clients’ financial reports to the US government for investigations and five common types of reports include

1)    Currency Transaction Report (CTR)

2)    International Transportation of Currency or Monetary instruments (CMIR)

3)    Report on foreign bank and financial accounts (FBAR)

4)    Suspicious activity reports (SAR) (A financial institution is not allowed to tell the client that a SAR report is being filed or else face penalties.

5)    Designation of exempt person report

Based on these reports, investigators will monitor cash flow, bank activities, and analyze on patterns of suspicious transactions to see if any violates U.S. federal laws. When U.S. court finds that funds are coming from criminal activities, foreign banks are required to release information on the account owner. If foreign bank officials do not disclose such information, thereby, violating the Bank Secrecy Act, they will face severe penalty fine and possible imprisonment.

If you feel that foreign banks’ secrecy policies may protect you from US. Government investigations, it is not exactly true. When you are under investigation, the US government has the right to defer foreign laws that protect your personal information.

If you feel that you are under investigation by the federal government for your overseas banking activities, call our New York City Federal Defense Attorneys immediately at (212)577-6677 for legal advice.

According to the US Attorney Manual, prosecution can be dismissed under most conditions, only with the written approval of the Tax Division, who must concur with the judgment of the United State Attorney that requests the dismissal.  The only exceptions to this rule are if the defendant dies or another superseding indictment is handed down from the grand jury.

Consequently, this same procedure applies to the Tax Division declining to prosecute a tax issue. The US Attorney should file a request for reconsideration, in writing, to pursue further prosecution.  Prosecution can only be declined if a grand jury finds no reason to investigate the matter or if the US Attorney requests that the prosecution be dismissed.  In the event that the grand jury finds no grounds to prosecute the tax matter, the government may not present the matter to another grand jury for investigation.

While it may be difficult to convince the prosecution to dismiss your New York federal criminal case, a white collar defense lawyer in New York can provide you with representation throughout the investigation process and ensure that the prosecution of your tax matter is handled fairly.  Call our New York criminal tax lawyers at (212) 577-6677 today to set up an immediate consultation.

Each year, many people fail to file their New York  tax return for any of several reasons.  Among these people, most usually meant to file, but didn’t because they were too busy with work and life to meet the deadline or because they were too overwhelmed by the endless complexities of the system.

Unfortunately, a failure to file often looks to investigators like an attempt at tax evasion.

Tax evasion is a deliberate attempt to avoid paying required taxes.  Title 27, Section 7201 of the United States Code defines tax evasion as any willful attempt “to evade or defeat any tax imposed by this title or the payment thereof.”  Failure to file tax return is also a crime in New York. It’s a serious offense that could have real consequences, especially if you don’t get legal help immediately.

Most personal income tax returns are due April 15^th of the year following the relevant financial activity: you’ll need to report all 2010 income by April 15, 2011.

However, some tax forms have deadlines on other dates.  As an example, off-shore bank accounts must be reported on a separate form by June 30^th, but other forms that may be relevant to you could be due before April.  Contact a tax law attorney with any questions as to which forms and deadlines you need to follow.

If you do miss a deadline, you could be charged with the criminal tax evasion.  The federal law categorizes the offense as a felony, punishable by fines of up to $250,000 for individuals or $500,000 for corporations, as well as imprisonment for up to five years.

On top of all that, you would probably also be required to reimburse the government for whatever it cost them to prosecute you.

If you know you won’t be able to meet a tax filing deadline, there may extensions available. These ironically require almost as much paperwork as the tax forms themselves, but again, a tax law attorney could help to guide you through them.

It’s important to note that tax evasion is only a crime when it is “willful.”  If you mailed your form in January, February, March, or even early April, but then it got lost in the mail, you could still be charged but you should not be convicted.  You actions would not have met the legal requirements for criminal liability.

In a situation like this, or in any other where you might find yourself innocent but accused, you should retain a qualified defense attorney right away.  Your attorney can argue your case professionally and make sure you are not wrongfully convicted.

If you did knowingly try to get out of paying taxes, you’re not alone.  In today’s economy, many people are desperate to keep a little more money in their pockets.  To avoid the truly damaging legal penalties, you too should consult an attorney as soon as possible.  Legal defense is usually most effective at the early stages of proceedings, before the prosecution has completed their investigation and perfected their arguments against you.

Tax evasion is often a reality in this depressed economy.  If you or someone you know may be struggling with a tax evasion issue in New York, a good tax fraud defense attorney could be the solution to your problems. You can call our New York City tax fraud defense lawyers today at (212) 577 6677 to discuss your case.

Filing a tax return can be one of the most stressful tasks that people face all year.  That complicated maze of forms, deductions, withholding… it just never gets any easier.

Sometimes, even with the best of intentions, mistakes can be made.  Alternatively, especially in this rough economy, it can be tempting to fudge your numbers just a little.  What can happen if you’re caught in one of these two scenarios?

Well, the take-home point is that the dividing line between these situations is the dividing line used by tax fraud investigators and prosecutors when they make their decisions on when to press charges.  By the legal definition, tax fraud is an intentional crime.  In other words, an unintended misrepresentation on your return is not illegal if it was really an honest mistake.

In a variety of different tax matters, real mistakes can unfortunately look like willful fraud to investigators.  If you are facing an investigation or charges even though you filed your information as honestly as you could, you need to retain an attorney who can assert your rights and ensure that you are not convicted of a crime you did not commit.

For those of you who did happen to sweeten the numbers in your favor, it’s also crucial that you retain an attorney right away.  Often, a legal professional will be able to negotiate with the prosecutors and thereby have your penalties significantly decreased.

If you are contacted by investigators, you would be well advised to seek legal counsel before responding to any of their questions or demands.  You don’t want to say anything that could make your situation worse than necessary, so leave the communication to your attorney, the expert.

For intentional tax fraud, the possible penalties include expensive fines and even time behind bars.

United States Code, Title 26, Section 7206 is the law that sets out the specific penalties for tax fraud.  They are as follows: fines up to $250,000 for individuals or up to $500,000 for corporations, and imprisonment for up to three years.

As a final kick after you’re down, the law adds that charges associated with prosecution can be taken out of your pocket.

The statute of limitations on most tax fraud crimes is either three or six years from the date your return should have been filed or the date your payment was due.  Prosecutors can secure an additional nine months after filing a criminal complaint against you.  Still, if your tax fraud offense was in the distant past, you will probably not face charges.

In conclusion, tax crime penalties are severe and should be taken seriously.  Although unintentional mistakes should not lead to convictions, they can often leave you vulnerable to prosecution at the very least. Contact a professional defense attorney in any situation where you may be facing charges, but do your best to make sure your taxes are right from the start.

If you need help with a criminal tax law issue in New York, consult our NYC tax fraud defense lawyers at (212) 577 6677 as soon as possible.

A net-worth investigation is another term for tax evasion investigation, which refers to an investigative method frequently used by the Internal Revenue Service (IRS) or the New York State Department of Taxation and Finance to prove taxable income in civil and criminal income tax evasion cases.

The method usually involves a determination of the taxpayer’s net worth at the beginning and at the end of a taxable year, computing the increase or decrease In net worth, and then adjusting this amount for nondeductible and nontaxable items. Ideally the amount resulting from this method is taxable income. By comparing it with the income reported on the alleged perpetrator’s taxable income, the tax fraud agent will determine whether filing is suspicious fraud or not based on the number’s discrepancy.

An obstacle, many of our clients run into when charged with tax evasion is that they maintain no books and records or that they run a cash based business, which in turn would cause legal officials to overstate their net-worth in order to receive more restitution or charge more penalties. Solutions to such problems, usually involves hiring a private accountant to adjust the overstatement for nontaxable income, or to carry the loss forward to the prosecution years and reduce the alleged tax deficiency as much as possible.

But depending on the facts of each case, such defenses may or may not pertain to the tax fraud charges being held against you. What our office does advise for every defendant charged, is to refrain yourself from making an admission without an attorney present.

Specifically for clients who are accused of tax evasion and operate on cash based business, the admission of the defendant has more standing than the estimated net-worth government tax agents can provide.

If you are investigated for tax crimes in New York, you should call an experienced New York criminal attorney at the onset of the investigation.  With any questions regarding defense to tax fraud cases in New York City, call our office at (212) 577-6677 to get professional legal assistance.

Informally known as the “Helmsley Loophole”, or formally know as CPL §40.20(2), which states that a person may not be separately prosecuted for two offenses based upon the same act or criminal transaction, will be eliminated from New York State Law.

What does this mean?

The Helmsley Loophole is a defense used in many New York State prosecuted tax evasion cases. The loophole shielded defendants from New York State prosecutions for tax evasion based on the same criminal transactions for which they were tried separately in federal court. Based on this loophole, New York State courts had generally dismissed state tax charges under double jeopardy grounds because the defendant is being prosecuted in federal court for the tax evasion stemming from the same criminal transaction.

But with the new legislation, New York State’s Taxation and Finance investigators are ready to start new files against defendants for tax evasion and fraud. New York State prosecutors are permitted to indict perpetrators who have already been charged in federal court for separate, but related federal tax crimes as long as the crime was committed within New York jurisdiction.

Not only is the new legislation going into effect, a new Taxpayer Protection Bureau is also being established within the New York Attorney General’s Office to help regulate such tax irregularities.

At Joseph Potashnik & Associates, we have a panel of some of the most skilled New York State and federal criminal defense attorneys specializing in various areas of federal and New York State tax evasion defenses.

If you are being investigated for tax evasion charges in New York City, then call our office at (212) 577-6677 to get professional legal advice.

Yes. Selling Virginia taxed cigarettes is considered to be cigarette smuggling in New York, if the carton of cigarettes do not possess a New York State tax stamp. In order to sell a carton of cigarettes in New York City, the carton must possess a New York State tax stamp otherwise; this is interpreted to be evading New York state and local taxes.

Higher New York State Cigarette Taxes = Lower Profit To Sales

In recent news, three individuals were arrested for charges engaging in the sale of untaxed cigarettes. Despite having cartons of cigarettes taxed by Virginia, which ranges from 15 to 65 cents per carton depending on the county, they were not taxed in New York and the alleged offenders were selling them at New York City prices.

Like many tax evasion cases, New York State takes such actions very seriously. Cigarette smuggling is defined as a violation of New York State Tax Law 1814, also known as the Cigarette and Tobacco Products Tax.

Once the investigation on cigarette smuggling is instigated, detectives from the District Attorney’s Crimes Against Revenue Unit will not hesitate to make the arrest once sufficient evidence is gathered.

Cigarette smuggling carries serious consequences in New York State, such as extensively long jail time and hefty fines in addition to reparations for lost taxes. It is therefore, essential to contact an experienced and skillful criminal defense attorney at the minute you become aware of an investigation. This will not only minimize your risk of self-incrimination but it will also optimize your defense.

If you are currently being investigated or arrested for violating the New York State Tax 1814, call our office at (212) 577-6677 for professional legal advice.

Although each individual case is addressed based on its own facts and there is generally no litmus test to guarantee the outcome of a certain case, there are certain facts within certain tax fraud cases that investigators will take into consideration and opt for criminal prosecution.

In order for an investigator to refer the case to the New York State District Attorney’s Office, he/she must examine the seriousness of the tax fraud or misconduct, which is determined through:

• The size of the tax loss involved.
• If the loss stems from multiple tax types.
• Whether the loss persists over multiple time periods or for multiple taxpayers.
• Whether the fraudulent tax activity is combined with other fraud or illegality.
• The reasons for the fraud and the degree of venality displayed.
• Factors relating to the taxpayer or the subject of the inquiry:

Early on in the case, an investigative agent will contact the person they suspect of fraud and audit them for more information. Generally, the agent will audit the offender for information they don’t have. So, it is within the best interest of the offender to contact a New York State Criminal Defense Attorney before submitting any documents to the New York State Department of Taxation and Finance.  This will prevent the offender from incriminating himself and will probably mitigate/dismiss the charges for the offender (depending on the case).

If you are being investigated or arrested for tax fraud in New York State, then call our office at (212) 577-6677 to get professional legal advice.

Tax return fraud generally involves the preparation and filing of false income tax returns by tax preparers who claim inflated personal or business expenses, false deductions, unallowable credits or excessive exemptions on returns prepared for their clients.

This has been an ongoing problem for the taxpaying public. In many situations, the taxpayer may not have knowledge of the false expenses, deductions, exemptions and/pr credits on his or her tax return. As a result, taxpayers, at best, are stuck with paying additional taxes and interest and sometimes, depending on their culpability, are subject to civil penalties and criminal investigation by the IRS Return Preparer Program.

Taxpayers should be very careful when choosing a return preparer. Even though it is essentially the abusive tax preparer that files false and fraudulent tax returns, it is the tax payer’s responsibility for all the information submitted on the tax return.

Federal and state law enforcements have recently doubled their case referrals to criminal prosecution for tax fraud. The IRS and the New York State Department of Taxation and Finance investigators will scrutinize any inconsistency that they may find between submitted and actual information. They usually find these discrepancies as intentional tax fraud.

It is therefore important to contact a criminal defense attorney at the onset of the investigation. If you are currently being investigated or charged with tax fraud in New York, call our office at (212) 577-6677 to get professional legal assistance.

Diana Rabin a New York City accountant have been arrested and charged with multiple counts of grand larceny, conspiracy and tax fraud. It was alleged that Rabin was preparing false New York State tax returns for herself and four other clients in a conspiracy to receive approximately $1.1 million of New York State Tax refunds.

Between March 2004 and June 2010, Rabin had allegedly been preparing and filing false tax returns to the New York State Tax Department for herself and several other clients. Rabin’s conspiracy to defraud the State purportedly consists of enlisting numerous employers, filing inflated wages, charitable contributions, state and city withholding taxes and other expenses without proof.

Rabin’s alleged tax fraud scandal misappropriated a total of $1,090,723 in tax refunds.

If convicted, Rabin faces a maximum sentence of 15 years of imprisonment.