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What Qualifies as an Attempt to Evade Taxes?


Tax evasion (Title 26, United States Code, Section 7201) is a broad term for any illegal activity in which a person or company tries to deliberately avoid or underpay their taxes.

While late filing or making mistakes on your taxes can result in fines or penalties, the most serious tax issues involve fraud. Tax fraud not only carries higher penalties but it can also result in criminal charges.

Attempting to Evade Taxes

Attempting to evade taxes can take a number of different forms. While the most common examples of evasion and fraud involve filing false tax returns and hiding assets, it can also include:

  • Keeping a double set of books;
  • Creating false invoices or documents;
  • Hiding income;
  • Not reporting employee wages to the IRS.

Proving Tax Evasion

Simply failing to file a tax return or accidentally paying less than what you owed does not meet the affirmative act requirement.

The government must prove the following three elements beyond a reasonable doubt:

  • an affirmative act constituting an attempt to evade or defeat tax payment;
  • an additional tax due and owing; and
  • willfulness.

If an individual fails to file a tax return and the government can show a tax liability, a tax deficiency arises on the date that the return is due. A deficiency is the difference between the amount that a taxpayer reports on their tax return and the amount that the Internal Revenue Service (IRS) determines is actually owed.

Penalties for Tax Evasion

In addition to a civil assessment, people experiencing tax fraud allegations can also face felony criminal charges.

If found guilty of official charges, a person can be liable for payment of unpaid taxes and/or be required to serve jail time. According to the IRS, the penalties include

  • Jail time of no more than five years;
  • A fine of no more than $250,000 (for individuals);
  • A fine of no more than $500,000 for corporations;
  • The costs of prosecution.

As a former federal prosecutor, criminal court judge, and U.S. Marine Corps officer, Patrick McLainknows what you are up against and what it takes to win a fight. Contact us online or at (214) 238-9392 to schedule a consultation with our accomplished Dallas federal criminal defense lawyers.

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