Rae Shearn has been practicing and teaching criminal defense law for more than 35 years. She is the proprietor of Rae Shearn Law Offices in Dade and Broward Counties, Florida. During her career, she has achieved a great deal and earned a reputation as one of the most talented and determined defense attorneys in the state of Florida.
She has been certified as a death-qualified criminal defense attorney since 1997. She was an adjunct professor at the University of Miami Law School and St. Thomas University and has been recognized as a Client Champion since 2005.
While this is far from her complete list of accomplishments, we simply do not have the space to cover all of her achievements here. Lately, Rae has been looking into the nuances of tax fraud and federal warrants. We asked Rae to share some of the insights she has developed on those topics. Here is some of what we discussed.
Rae Shearn Comments on Tax Fraud & Federal Warrants
“Tax warrants are not something you want to encounter,” Shearn explains. “There are things people can do to avoid them, and there are things you can do after such a judgment has been filed against you.”
A tax warrant is a judgment filed against a person which creates a lien on their wealth and property when the individual has failed to pay a tax balance. It means the IRS can seize cars, furniture, land, houses, and any other property and assets the person of interest may have until the balance is paid. Usually, the best way to avoid having a tax warrant issued is to pay your taxes immediately when it is due.
Tax warrants can be made visible in your financial history and will affect your credit, Shearn explains. That means it can hinder your ability to qualify for financing and becomes a part of your public record.
“When people get a tax warrant for failure to pay,” Rae says, “I advise them to communicate with the IRS at the earliest opportunity. Tell them that you have every intention to pay your debt and explain if and what barriers to payment might be preventing you from paying sooner than later.”
She explains that an attorney can speak with the IRS instead of the person concerned. This can save a person a lot of anxiety, and protect them from saying something that the IRS might take the wrong way.
She goes on to explain that if the person against whom a warrant is issued appears cooperative, the IRS is likely to be less aggressive. Most of the time, people are given a payment schedule and allowed to make payments over time. However, for those who are accused of tax fraud, things can get more serious.
The legal consequences of a charge of tax fraud can be extreme. If the IRS leverages such a charge against you, they might seize property just as they would do with someone who has a warrant. But they may also impose as much as $250,000 in fines.
It is important to remember that the IRS can’t throw you in jail. If you are charged with fraud and found guilty, it could mean prison time. Charges of fraud and warrants sound like the kinds of things people get hauled to jail for. But in the case of federal tax debt and fraud, the thing we want to beware of in the short term, is the seizure of assets described above.
Shearn explains, “The IRS investigates unusual activity or tax anomalies through audits.” An audit is a thorough review of your taxes and financial records. People are audited every day. It does not necessarily mean you have done anything wrong. The IRS investigates what it considers tax anomalies on a routine basis.
Of course, while it may be routine for the IRS, it feels far from routine for the person targeted. When the IRS conducts an audit, they will examine tax records going back over the previous six years. If they find additional anomalies, the IRS might impose penalties and fines.
In any event, the worst thing you can do is misrepresent your income. This can generate anomalies that the IRS is likely to investigate. Misrepresenting your income can also trigger red flags when you apply for a loan. Lenders will look at your tax forms to get a clear idea of how much of a loan you can qualify for.
If you have not reported all of your income, a loan officer might be able to see the signs. What’s more, Rae Shearn explains, if a loan officer can spot potential anomalies, then IRS agents reviewing your filings will be able to see them as well.
In conclusion, R. Shearn reminds us that filing your real income is important. Be forthcoming with the IRS if you are being audited or if you have a tax warrant. If you do have a warrant or are being charged with tax fraud, it is important to get legal representation as early as possible.
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