What is Tax Evasion?

It’s a white collar crime — a felony — but just what is tax evasion? And what should you do if you’re charged with it?

Tax Evasion Defined

Simply put, tax evasion is using illegal means to avoid paying taxes.

In the Tax Crimes Handbook, the IRS defines two types of tax evasion:

The willful attempt to evade or defeat the assessment of a tax
The willful attempt to evade or defeat the payment of a tax

Evasion of Assessment occurs when an individual or corporate entity files a false tax return that “omits income and/or claims deductions to which the taxpayer is not entitled.”

The result is illegally owing less in taxes than what should have been collected. This is not the same as taking legally allowed tax deductions and tax credits to reduce the amount of taxes you owe.

Evasion of Payment, on the other hand, occurs after the tax owed has been determined but then “an affirmative act of concealment of money or assets from with the tax could be paid” happens.

In this case, the ability to pay the taxes owed is illegally hidden to avoid having to pay.

However, as with any criminal charges, the burden of proof is on the prosecution. And proving tax evasion involves proving three separate elements.

Proving Tax Evasion

Criminal tax evasion goes beyond making a mistake on your tax return. In order to prove the charges of tax evasion, the government must prove three things:

There is an unpaid tax liability
There was some sort of affirmative act to evade or attempt to evade a tax
There was specific intent to evade a known legal duty to pay a tax

They must prove all three beyond a reasonable doubt for a conviction of tax evasion to occur.

Intent can be especially tricky to prove. And this is where having a criminal defense lawyer experienced in white collar crimes like tax evasion can help you challenge and fight the charges against you.

Penalties for Tax Evasion

If convicted, U.S. IRC (Internal Revenue Code) 7201 stipulates that any person who willfully attempts to evade or defeat taxes can be charged with a felony, with penalties including up to $100,000 in fines ($500,000 for corporations) and/or up to 5 years in prison, plus the costs of prosecution.

If You’ve Been Accused of Tax Evasion

Tax evasion is a serious criminal charge. So, if you’re facing charges of tax evasion, it’s important to obtain legal counsel to help protect your rights and help you fight the charges.

There are legal defenses for white collar crimes like tax evasion. Don’t just wait and hope for the best. Call (559) 691-6222 or use our convenient online form to Schedule a Consultation to get legal help today.