When the tax authorities come knocking, it is natural to feel a sense of unease. Your freedom, personal and professional reputation and financial security are all on the line. Protecting your assets becomes a priority in the face of a tax fraud investigation.
Protecting your assets is crucial
When an investigation starts, tax authorities can freeze your accounts or seize your property. To protect your assets during this critical time, consider the following steps:
- Gather all relevant financial documents: Collect bank statements, tax returns, receipts and other financial records.
- Avoid making any sudden or large financial transactions: Courts may view this as an attempt to hide assets.
- Refrain from destroying or altering any documents: This could be seen as obstruction of justice and may lead to additional charges.
- Set up a separate bank account for legal fees: This can help you manage your defense costs.
- Explore asset protection strategies: Trusts and other legal structures may help shield your assets.
California courts can impose penalties of up to 75% of the unpaid tax for fraud or intentional disregard of rules and regulations. The state’s laws also allow for criminal prosecution in severe cases, which can result in fines of up to $20,000 and imprisonment for up to three years.
It is crucial to note that you must protect assets in a legal and ethical manner. Engaging in fraudulent transfers or trying to conceal assets can lead to additional charges and severe penalties.
High-stakes matters require robust defense strategies
Confronting a tax fraud investigation does not automatically equate to guilt. You have rights, and the legal system provides avenues for defense. Throughout the investigation process, and even beyond that, your attorney is often your best resource.