The Internal Revenue Service which is responsible for the collection of taxes in the United States also holds the right to impose different types of penalties. Also, the investigation of tax related crimes is carried out by a department of IRS. There are many cases of tax frauds that are detected every year and penalties related to it are certainly charged by the IRS.
Filing tax returns based up on false information is considered as tax fraud as well as a criminal offense. Besides, an attempt to falsely quote the income earnings and eventually paying the income tax based on the false income is also one kind of tax fraud. If a person is convicted by the IRS as committing tax fraud, he may be subject to monetary penalties as well as property seizure and some time in jail. Before conviction, a thorough investigation is carried out by the IRS as to detect whether a tax fraud happened.
When a person is convicted of a tax fraud, the hearing and sentencing is done through the court system under the US Department of Justice. While the prosecution is being carried out, the taxpayer has a right to appeal against it and prove himself clean from all the charges. Generally, in such cases the IRS appoints its own tax lawyers for fighting the case and prove the person guilty of tax fraud.
Tax fraud is a serious offense and any person trying to hide his income can be convicted with it. Also, people who aid others in committing this crime are liable to penalties from the IRS and legal prosecution.