Tax evasion involves illegal methods to avoid paying taxes. The crime is when an individual or corporation deliberately misrepresents income to the Internal Revenue Service. Tax evasion can lead to imprisonment, substantial financial penalties, or both.
If you’ve been charged with tax evasion or another kind of federal tax fraud charge, call the Zoukis Consulting Group. Our tax fraud attorneys defend your rights in court and try to get you a lesser sentence. Having a qualified attorney for tax fraud ensures you will get the proper representation.
Types of Tax Fraud
There are two primary forms of tax evasion that are recognized by the IRS. That’s the evasion of payment and evasion of assessment.
Evading assessment requires transferring assets so that the IRS cannot determine a person’s true tax liability. Whenever someone hides assets to avoid due and owing, that’s an attempt to evade payment.
Assessment Evasion
Taxpayers are legally obligated to report all taxable assets. Whether a person or entity, any action designed to defeat the assessment of an asset that requires a tax is a crime. In the eyes of the law, the under-reporting of assets is a clear sign of evasion.
Payment Evasion
The act of failing to pay owed taxes is not necessarily an evasion of payment. What constitutes the crime is an act used to evade paying taxes. We’re talking about concealing assets or money which require you to pay taxes.
A taxpayer might remove the assets, putting them in, say, a foreign bank account. They might take assets and place them in a family member’s financial account.
Examples
Tax evasion charges constitute the government proving there’s an affirmative act to avoid discovery. Error in the paperwork or even unpaid taxes is not sufficient for getting charged with tax evasion. The charge is more about intent.
Here are examples the prosecution will use to evidence fraud.
- Deliberately including false information on a tax form
- Maintaining different and separate books for accounting
- Creating false invoices
- Hiding unreported income
- Destroying records
- Holding assets in someone else’s name
- Inflating deductions
- Using a false SSN
If you want to know more about any of these topics or find yourself accused, reach out to a tax fraud attorney.
Elements
The elements of tax fraud include:
- The attempt to evade or hide a required payment. The prosecutor must demonstrate there was an act that affirmatively supports failure to pay or to evade assessment.
- A tax is owing and due. You are not guilty of tax evasion if you don’t legitimately owe. The burden of proof that a tax is due rests with the government.
- There has to be willfulness. That’s evidence of an intentional and voluntary attempt to dodge your legal duty. Ignorance of a violator’s idea no tax evasion occurred has no place in a legal defense.
- The crime is a felony regardless of the amount owed. If charged, the United States Attorney will not look at the scale. All that’s required is proof beyond a reasonable doubt the offense contains appropriate elements for tax evasion.
Penalties
When charged with tax evasion, you could find yourself looking at up to five years imprisonment. Fines can go as high as $250,000 with individuals and $500,000 for corporations. Some charges do max out at $100,000 (individuals) and $250,000 (corporations).
The court will impose payment to recover taxes along with applicable interest and fees.
Common Criminal Penalties
If charged, here are some of the more likely scenarios and possible outcomes.
Not Filing
A conviction carries civil tax penalties. Extreme cases can land you up to a year of confinement and $100,000 in fines for each unfiled tax year.
Filing Fraudulent Returns
Filing false tax returns is a felony with up to three years in prison and $100,000 in fines attached.
Concealment or Misrepresentation of Finances
You’re looking at a felony with a max penalty of five years and up to $100,000 in fines.
Failure to Pay
Another felony, there’s a penalty of up to three years and fines of up to $250,000.
Let a Tax Fraud Attorney Help
To start, if you are ever questioned or accused, it’s important to not say anything. The IRS and its investigators will overlook mistakes but will not tolerate lies. Lying to the IRS can land you another charge on top of any tax evasion charges.
The IRS will conduct an airtight investigation to prove tax fraud. They’ll talk to family, friends, colleagues, coworkers, neighbors, employees, bankers, associates, and insurance agents. The IRS is capable of tracking travel activities and department store purchases.
The only way you’re going to be properly protected when facing evasion charges is with a tax fraud attorney. Your tax fraud lawyer is only the individual that legally isn’t forced to speak with the IRS. Plus, most individuals contracted by your legal team are also protected by the attorney-client privilege.
Call the Zoukis Consulting Group now to let us start defending you and seeing your rights are upheld. Schedule a free consultation with our tax fraud lawyers today.
Published Feb 15, 2022 by Christopher Zoukis, JD, MBA | Last Updated by Christopher Zoukis, JD, MBA on Feb 2, 2023 at 12:53 pm
