Free Tax Guide
What Is the Criminal Tax Fraud and False Statement?
Key Takeaway
Criminal tax fraud and false statement offenses involve four main statutes: (1) IRC §7206(1) — false return perjury; (2) §7206(2) — aiding preparation of false return; (3) §7207 — fraudulent returns, statements, or other documents; and (4) 18 USC §1001 — general false statements to federal government. The short version is that §7206(1) is commonly called “tax perjury” and is a felony. In our experience, false-return charges are often filed as alternatives or additions to tax evasion charges.1
False statement charge? A 15-minute consultation is free.
Four false statement / fraud offenses.
The Four Fraud / False Statement Offenses
7206(1)Perjury7206(2)Aid Prep7207Fraudulent Docs18 USC 1001False Statement
| Offense | Penalty2 |
|---|---|
| §7206(1) | 3 years + $250K |
| §7206(2) | 3 years + $250K |
| §7207 | 1 year misdemeanor |
| 18 USC §1001 | 5 years + $250K |
Quick Reference
Jump to: 7206(1), 7206(2), 7207, or 18 USC 1001.
1. §7206(1) — Tax Perjury
Willfully making false material statement on return under penalty of perjury.
If this is you: False material statement on tax return. Known false. Signed under penalty. Felony 3-year exposure.
§7206(1) Strategy
- Challenge materiality.
- Establish good-faith defense.
- Dispute knowledge of falsity.
- Contest willfulness.
- Engage counsel.
2. §7206(2) — Aiding Preparation
Willfully aiding preparation of false return.
If this is you: Tax preparer, accountant, or advisor. Aided preparation of false return. 3-year felony. Professional exposure.
3. §7207 — Fraudulent Documents
Fraudulent returns, statements, or other documents to IRS.
If this is you: False document to IRS (not return). 1-year misdemeanor. Less severe than §7206 but still criminal.
4. 18 USC §1001 — False Statements
False statement to federal government in any matter.
If this is you: False statement to IRS agent, investigator. 5-year felony. Separate from §7206. Statements during investigation can trigger.
False statement charge? Book consultation immediately.
False Statement Lookup
| Authority | Offense |
|---|---|
| IRC §7206(1) | Tax perjury |
| IRC §7206(2) | Aid preparation |
| IRC §7207 | Fraudulent documents |
| 18 USC §1001 | False statement |
| USSG §2T1.4 | Aiding sentencing |
False Statement Statute
- §7206: 6 years.
- §7207: 3 years.
- §1001: 5 years.
False Statement Patterns
| Situation | Outcome |
|---|---|
| False material return statement | §7206(1) |
| Preparer prepared false | §7206(2) |
| Lie to CI agent | §1001 |
| Minor false document | §7207 |
False Statement Escalation
Investigation
CI gathers evidence.
Indictment
Per count.
Trial
Materiality, knowledge, willfulness elements.
First 48 Hours
- Do not speak without counsel.
- Preserve records.
- Document good-faith basis.
- Evaluate defenses.
- Engage criminal tax counsel.
★Brotman Law defends §7206 / §1001 charges. Based in San Diego.
The ROI Question
Felony exposure up to 5 years. Professional defense essential.
Under Criminal Tax Investigation?
If you know or suspect the IRS Criminal Investigation division is looking at you, the time for routine tax advice is over. What you say and do in the early stages matters significantly — and the window for voluntary disclosure closes the moment CI makes contact. If you’re in this situation, get counsel before you respond to anything.
Get Criminal Tax Counsel → Or call: (619) 378-3138
When to Engage
- False return investigation.
- Preparer liability concern.
- False statement to CI.
- Grand jury subpoena.
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Guide Chapters
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Frequently Asked Questions
What is §7206(1)?
Tax perjury. Willfully making false material statement on return under penalty of perjury. 3-year felony + $250K per count.
What is §7206(2)?
Willfully aiding or assisting preparation of false / fraudulent return. Preparer / advisor liability. 3-year felony.
What's §1001 false statement?
18 USC §1001 general false statement statute. Lie to federal investigator. 5-year felony. Often charged alongside tax offenses.
What is materiality?
Statement capable of influencing IRS action. Materiality is element government must prove. Minor misstatements may not be material.
Can I defend good faith?
Yes. Good-faith belief in accuracy defense. Cheek applies. Document beliefs.
Is this different from evasion?
Yes. §7201 evasion requires affirmative act + willful evasion. §7206(1) is perjury on return. Often charged alternatively.
What's preparer liability?
§7206(2) — aiding / assisting false return preparation. Criminal exposure for preparer. Civil §6694 penalties separate.
Can lies to CI trigger §1001?
Yes. Statements during investigation. Miranda-like warning not required. Attorney representation essential.
What's the sentence?
§7206: 3 years per count. §1001: 5 years per count. §7207: 1 year. Guidelines drive actual.
Can I raise Cheek here?
Yes for willfulness. Good-faith belief statement was accurate. Subjective belief standard.
What about electronic returns?
Same rules. PIN signature under penalty of perjury. Electronic filing doesn’t change liability.
Does plea on §7206 help?
Often better than evasion plea. Lower base offense level. Plea strategy negotiation.
What if accountant is charged?
§7206(2). Accountant / preparer criminal exposure. Firm indemnification + separate counsel typical.
Next Steps
False statement charge? 15-min consultation free.
- False statement offenses: IRC §§7206, 7207; 18 USC §1001.
- Penalties per statute and sentencing guidelines.
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