What to Do if Accused of Tax Evasion

Individuals, corporations, and trusts have a certain tax liability or amount required to pay. Failure to pay or illegal underpayment of those taxes as well as the misrepresentation of assets to lower expected payment amounts constitutes tax evasion, which is a very serious federal crime. 

In this brief article, a federal criminal defense attorney in St. Petersburg discusses the differences between tax evasion and tax avoidance, as well as what to do if you have been accused of tax evasion.

Related: Tax Evasion: How Failing to Pay Taxes Can Lead to Jail Time

What Is the Difference Between Tax Evasion and Tax Avoidance?

Tax evasion is a federal crime investigated by the Internal Revenue Service (IRS). To prove tax evasion, prosecutors must determine that failure to pay was intentionally deceitful. This entails taking a look at the taxpayer’s financial situation as a whole to determine if any reportable income was hidden. A few common examples of tax evasion include: 

  • A person or business accepting cash payments for services or goods rendered rather than reporting work and income with traditional accounting methods. 
  • Concealing assets by associating them with another person’s name. 
  • Reporting income under a false or stolen social security number.

You do not need to file a tax return or quarterly tax information to be investigated for tax evasion. The IRS may open an investigation into any individual or business suspected of tax evasion at any time. 

Tax evasion differs from tax avoidance because tax evasion uses illegal means to avoid paying the appropriate taxes, while tax avoidance uses legal means to lower a taxpayer’s obligations. An example is the investment of income into a tax-deferred account like an individual retirement account (IRA) or through charitable giving. The other major difference lies in legality as a whole: tax avoidance is not illegal, while tax evasion is a federal crime. 

Related: Defending Against Tax Crime Allegations

What to Do if Accused of Tax Evasion

Accusations of tax evasion can be terrifying and expensive for both individuals and businesses. If convicted, tax evasion can carry a penalty of up to $250,000 (or more for businesses) and a prison sentence of one to five years. 

If you have been accused of tax evasion, it is vital to contact the best federal criminal defense lawyer in St. Petersburg. Your attorney will discuss possible defenses, which may include:

  • Proving the underpayment or nonpayment was not intentionally deceitful
  • Proving the income was not taxable
  • Proving that there is no basis for investigation

If you have been arrested and charged with a federal offense, legal representation will help you save valuable time during a long and costly investigation. The attorneys at The Rickman Law Firm have the knowledge and experience needed to fight federal charges from the IRS and other federal agencies. If you have been arrested, received a letter indicating that you are the target of a federal investigation, been contacted by a federal agent, received a Grand Jury subpoena, or have already been sentenced in Federal Court, contact the attorneys at The Rickman Law Firm for a free consultation. 

For a free consultation with a federal criminal defense attorney in St. Petersburg, please contact The Rickman Law Firm today.

Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation. 


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