To be convicted of tax evasion, a company or person must knowingly pay fewer taxes than they owe or commit fraud to reduce their tax liability.
The government must prove the defendant intended to avoid paying their share of taxes. Mistakes or carelessness in underpaying taxes is not considered tax evasion.
Common tax evasion examples
Companies and individuals are expected to face greater scrutiny from the Internal Revenue Service (IRS) under the Biden administration. Common red flags leading to investigations include:
- Understating income to the IRS
- Lying, concealing or delaying tactics to mislead investigators
- Giving inadequate or incomplete records to agents
- Providing inconsistent or conflicting statements and explanations
- Not filing tax returns
- Failing to submit mandatory tax payments
- Concealing taxable assets
- Committing tax fraud or participating in unlawful tax activities
In addition, the IRS is focusing on companies with virtual currencies, such as Bitcoin, alleging that some cryptocurrency users may be laundering money. The government is rolling out new technology to uncover transactions that crypto users assume are untraceable.
Defenses to tax evasion
An experienced white collar defense attorney understands the complex nature of tax evasion charges and finds bold and creative strategies that include:
- Lack of evidence
- Expired statute of limitations
- Mistakes or carelessness by the defendant
- Entrapment by investigators
Experience matters when the stakes are high
If you are charged or believe the IRS is investigating you for tax evasion, it is crucial to contact a knowledgeable lawyer immediately. The IRS must have clear and convincing evidence that you knowingly and purposefully tried to evade taxes. Your attorney will protect your rights every step of the way.