FEDERAL TAX EVASION STATUTE EXPLAINED
The crime of federal tax evasion is a common type of federal criminal offense that falls into the category of white-collar crime. The federal tax evasion statute can be found within the Internal Revenue Code (IRC) under Section 7201. There are two main criminal offenses listed under this section: 1) the willful attempt to evade the assessment of a tax, and 2) the willful attempt to evade the payment of a tax. It is required that a prosecutor must prove three major elements in order to convict someone of tax evasion under this statute. A prosecutor must prove that a defendant: 1) took an affirmative act representing an attempt to evade a tax or the payment of a tax, 2) has additional taxes that are owed and are due, and 3) willfully committed the acts. The government’s main objective in these cases is to prove that a defendant took some action or actions towards misleading the IRS in some way. The most common method that people take in attempting to evade taxes is to purposely file a false tax return, however there are other ways to be convicted under the statute. If you are facing questions from the government related to your taxes, then it is advisable to speak to an experienced federal white-collar crime attorney to best help you understand if you are subject to criminal charges.
UNDERSTANDING THE DIFFERENT TYPES OF EVASION
There are three main ways that someone can be found guilty under the federal tax evasion statute. The three types of tax evasion under the federal statute are: 1) the evasion of assessment, 2) the evasion of payment, and 3) the evasion of another’s tax.
The ‘evasion of assessment’ involves taking measures to conceal someone’s true tax liability from the government. A common method as mentioned above is filing a false tax return. People who are accused of evading assessment are typically doing so to avoid paying their true tax debt.
The ‘evasion of payment’ involves trying to avoid paying someone’s tax liability. This typically occurs after it is already established that there are taxes owed by an individual or entity. To be guilty of evasion of payment, someone must have taken an affirmative act to conceal money that could be used to pay outstanding taxes. Merely failing to pay your taxes owed, on its own, does not rise to the level of criminal evasion of payment.
The ‘evasion of another’s tax’ involves helping someone else in the evasion of their tax liabilities. This would include helping them file a false tax return or doing something that helps them conceal their true tax debt. This can include accountants purposely helping a client evade his or her taxes.
A conviction for the federal crime of tax evasion under I.R.C. Section 7201 means that an individual would be convicted of a federal felony that carries a potential prison sentence of up to five years, along with fines of up to $100,000 for an individual and up to $500,000 for a corporation.
HOW DOES THIS AFFECT ME?
If you have purposely filed a false return or taken some measure to evade paying your true tax liability, then this can affect you directly. While tax law can be incredibly complex, it does not relieve you of your responsibility to understand the law as it applies to you. Seemingly harmless acts related to the filing of your tax return can also be construed as intentionally trying to deceive or conceal and can result in federal tax evasion charges. Intent is an incredibly important factor in determining whether or not you are guilty of criminal charges. If a prosecutor is unable to prove that you intended to mislead the government related to your taxes, then you can properly be cleared of any criminal wrongdoing. Each case is different and requires individual and specialized advice. If you are being accused of federal tax evasion, then call us today at Bajoka Law so we can help.
