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Signs the IRS is Looking for to Prove Criminal Content

SBA loan audit

The potential penalties that arise when borrowers apply for the SBA PPP loan has business owners questioning whether or not they should keep their loan funds. Borrowers must consider their individual circumstances to make this decision, but there can be adverse consequences if you do not utilize the loan funds properly. 

With the looming potential of IRS audits coming in the next few months, many business owners are concerned that IRS might open a criminal tax investigation on them. There are a few things IRS looks for when looking to prove criminal intent. Here are a few signs that may trigger IRS to believe you have acted criminally:

The federal False Claims Act states that those who “knowingly (i) presents… a false or fraudulent claim for payment or approval [or]…(ii) makes, uses… a false record or statement material to a false or fraudulent claim” will be penalized. When auditing, IRS typically follows these guidelines to decide whether or not you acted with criminal intent. So, even if you might have “mistakenly” understated $10k, to get those SBA PPP loans, you should consult your CPA or tax attorney to review your tax documents and loan applications. This will help you identify whether you could be at risk for investigation or worse…charged for tax evasion. 

If this scenario sounds familiar, reach out to one of our tax attorneys at Milikowsky Tax Law. You will get expert advice and help from our team.  We specialize in Criminal Tax Defense and Government Audits.