Wondering if you can get away with not paying your taxes? For the Average Person, the answer is no. You go to prison for that.
Federal tax evasion can be committed by individuals, corporations, trusts, and other entities. It generally includes fraud or misrepresentation. It can involve underreporting of income, assets, profits, and gains. It also includes overstating deductions or taking deductions that aren’t authorized. Tax evasion may be discovered by the Internal Revenue Service. Employees or workers may also discover fraud and file a federal whistleblower claim which alerts the US Department of Justice to the tax evasion or fraud.
There are two basic types of tax evasion. The first requires the intent to deceive the IRS as to the amount of tax that is due. The second type of tax evasion is working to remove assets from the IRS’ reach, such as by opening up foreign accounts or retitling assets with someone who doesn’t owe the tax.
Or as Gobankingrates.com puts it, under Title 26 of the Internal Revenue Code, “’Any person who willfully attempts in any manner to evade or defeat any tax imposed by this title or the payment thereof…’ is guilty of tax fraud. Under this general umbrella of tax fraud falls tax evasion, which is a specific subset of activities such as non-disclosure of income or the reporting of false expenses.”
What are examples of tax evasion?
Tax evasion includes:
- Not reporting income
- Filing a tax return this is false
- Not collecting employment taxes
- Creating false documents
- Destroying records
- Keeping a second set of books
- Overstating deductions
- Changing the value of assets
- Filing a fraudulent return
- Concealing or misrepresenting financial information
- Failing to pay taxes
What if I messed up by accident?
Sloppy mistakes and accounting practices are generally not enough to prove tax evasion. There must be a deliberate knowing attempt to cheat the government. It is generally a defense to avoiding payment of taxes that you don’t actually owe the tax.
You may get hit with a fine if you screw something up, but the federal government isn’t in the habit of putting people in jail because they made an honest mistake. Just, you know, maybe hire a professional to help you with your taxes from now on.
If you don’t file a timely return or the IRS suspects you are evading taxes, the IRS will probably begin its investigation by conducting a formal audit. If you failed to file a return, you should do so immediately. If the IRS believes you evaded taxes, you should hire a tax lawyer and FAST. If they charge you, you should hire me and FAST, because you’re looking at prison time (1 to 10 years) and hundreds of thousands in fines, plus the back taxes you owe. It’s pretty easy to find yourself owing a cool mil to the government before you’re done.
Tax evasion brought down Capone, and he had people killed. Trust me when I say that you’re not gonna get lucky here. Contact Drew Cochran, Attorney at Law at 410-271-1892 or complete the contact form to schedule a consultation. I have offices in Annapolis and Ellicott City.
And remember: Keep Calm – and Call Drew.