Tax evasion is the capstone of the traditional tax crimes. It is the willful attempt, in any manner, to evade or avoid the payment of any tax, whether those taxes are a personal obligation or that of a business entity. There are two types of evasion: (1) evasion of assessment and (2) evasion of payment. Evasion of assessment is an attempt by the taxpayer to prevent the IRS from knowing that additional tax is due. Evasion of payment is an attempt by the taxpayer to defeat collection.
Examples of tax evasion include failing to report income (including hiding income in offshore accounts), misrepresenting or underreporting income, and taking inflated and unsubstantiated deductions (including an excessive charitable deduction or an unwarranted home office deduction). Even a relatively small income omission or excess deduction can cause the IRS to recommend that the taxpayer be charged with tax evasion.
Tax evasion is the worst that a taxpayer can do in terms of punishment for offending the tax system. It is a felony and the criminal penalties can be severe. Taxpayers convicted of tax evasion may be imprisoned up to 5 years or fined up to $100,000 ($500,000 in the case of a corporation), or both. Even taxpayers with no prior criminal convictions may receive a prison sentence. In addition to criminal penalties for tax evasion, the IRS may pursue costly civil tax fraud penalties as well.
If you are being investigated for tax evasion, have already been criminally charged with tax evasion, or fear you may be in the future, it is essential that you hire a qualified attorney with experience and a successful track record defending clients against the IRS and Justice Department in criminal tax matters. An experienced attorney representing your interests can ensure that your rights are protected, help avoid or minimize criminal liability, and achieve a solution that will protect your freedom and your assets.