People do not serve time for making simple errors or omissions on their tax returns. The IRS understands the U.S. tax code is complex, to say the least. An error in filing your taxes is not a crime. Purposefully hiding income, under-reporting income, or claiming deductions you are not actually entitled to, however, is a crime. Other tax crimes include the possession, sale or trafficking of unstamped/untaxed cigarettes. Tax evasion is serious.
What is tax evasion?
The IRS has two categories of tax evasion. The first form is an evasion of assessment, which occurs when the taxpayer takes some action in order to prevent the accurate assessment of a tax. It may involve hiding assets or transferring assets in order to stop the IRS from being able to determine their real tax liability. Intentionally under-reporting income would be considered an evasion of assessment. The intention to evade is key. There must be proof that the inaccuracy was not just the result of negligence.
The second form of tax evasion is an evasion of payment. This is when a person is hiding money when they owe payment of their taxes. This means a person is taking affirmative steps to hide assets that could be used to pay the tax owed. Some may try to accomplish this by hiding assets in a foreign bank account, out of reach of the IRS. Evasion of payment is not merely a failure to pay your taxes. It is more than that. The affirmative steps to hide money and assets to prevent payment of taxes are necessary. In both forms, the taxpayer must have taken affirmative steps to avoid the accurate assessment of his or her taxes or the payment of his or her taxes. Additionally, in both cases, the government carries the burden of proving that the taxes are legitimately owed.
Specific examples of forms tax evasion could take include:
- Filing a false statement or return
- Failing to file a tax return
- Providing false information during an audit
- Failure to pay taxes owed
- Hiding sources of income
- Transferring property to another’s name
- Destroying records
- Generating false invoices.
Both the IRS and the New York State Department of Taxation and Finance are aware that the commission of tax fraud is all too common. Each year, these government entities investigate large numbers of tax fraud cases. The government is not understanding with those that seek to defraud and withhold money owed. Penalties for tax evasion include fines of up to $250,000 in addition to any outstanding tax liability. Tax evasion can also land you in prison, and it can also lead to serious immigration consequences.
Queens Criminal Defense Attorney
The government puts vast resources towards investigating and prosecuting those charged with tax evasion. If you are charged with tax evasion, the government may wish to make an example out of you in an effort to deter others from thinking about engaging in such a crime. The result is that you may end up with a criminal conviction for tax evasion. A serious crime that will land on your permanent record. Heiferman & Associates will fight these charges with the full force of the law. We have successfully defended clients accused of tax crimes in state and federal court. Contact us today.