If you are a business owner and a taxpayer, you are likely aware that the Internal Revenue Service is awaiting the arrival of your returns, unless you've been granted an extension. Paying taxes is never a fun proposition, but if you do your returns correctly and send the IRS whatever is owed, you should not have any issues.
However, problems can arise if the IRS comes to the conclusion that your returns are not complete or are in some way fraudulent. In extreme cases, the IRS could file charges against you, just as it recently did against Caterpillar, the heavy equipment manufacturer. In fact, the IRS raided Caterpillar's headquarters in Illinois as well as other facilities.
According to a Securities and Exchange Commission filing made by Caterpillar last month, the IRS is claiming the company owes $2 billion in taxes. This amount is allegedly related to profits generated from 2010 to 2012 by Caterpillar's Swiss unit known as CSARL.
In a strange twist, the raids followed the publication of a report in the New York Times claiming Caterpillar was not in compliance with U.S. financial reporting rules or U.S. tax law.
For its part, Caterpillar says that it takes its tax obligations seriously and that it pays what it owes.
But it's not only large corporations like Caterpillar that can face serious tax issues. Any business could come under scrutiny and in some cases, a conviction for federal tax law violations could prove financially ruinous. What's more, you could even have to pay a steep fine or receive a prison sentence.
Therefore, if the IRS accuses you of fraud or other tax-related offenses, it is vital to get started working on your defense as soon as possible. And an attorney who is well-versed in tax law and the federal court system could work on your behalf to protect your interests and the interest of your business.
Source: The Washington Post, "In wake of fed raids, Caterpillar denies skirting tax laws," Mar. 10, 2017