Tax evasion is a part of tax fraud law. For more information on tax fraud in general, click here
What is Tax Evasion?
Tax evasion is the intentional underreporting of income or over-claiming of deductions. Tax evasion is not to be confused with tax avoidance, which is the legal usage of the tax code to minimize ones' tax liability within the law. Tax evasion is a serious crime whereas tax avoidance is generally accepted.
Types of Tax Evasion
There are two types of tax evasion: evasion of assessment and evasion of payment. Evasion of tax assessment is more common and generally involves the filing of a false return that omits income or claims deductions to which the taxpayer is not entitled. It involves attempting to prevent the IRS from knowing the filer’s accurate tax liability calculations. Evasion of payment occurs after the tax liability is due and owing and usually involves some affirmative act of concealing the assets that would be used to pay the tax liability. Evasion of payment is a different offense, typically more serious than simply failing to pay one’s taxes.
Charges & Penalties
Tax evasion is a felony whereas the willful failure to file a tax return is a misdemeanor. But both offenses require payment of a statutory fine. Tax evasion is punishable by up to five years in prison and a fine of as much as $100,000, on top of the payment of any taxes due. When it comes to taxes, the statute of limitations can get confusing. The general rule is that the IRS has three years to audit your tax returns, and if the IRS determines a significant underpayment of taxes, it has a total of six years to file charges. Despite the limitations the IRS faces when it comes to filing criminal charges, there is no such limitation on the civil side when the IRS determines fraud is involved. The IRS can look back as far is it wants when suing for civil fraud.
Tax Evasion Attorneys
Tax evasion is a very serious offense and a conviction carries with it significant financial penalties in addition to the possible lengthy sentences. If you are under investigation for a tax-related offense or have already been charged, it is important to hire an attorney with the knowledge and experience necessary to represent your interests.
With a CPA on our team of elite defense attorneys, we are highly qualified and very knowledgeable about the law and investigatory process. Lawyers at Gaskins Bennett & Birrell have handled many complex tax evasion cases. Effective lawyers have to have a savvy understanding of these issues and a determination to wade through the facts and tell your side of the story.
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