Tax evasion must be intentional

On Behalf of | Feb 3, 2023 | Firm News

Ben Franklin once said that “nothing is certain but death and taxes.” In fact, taxes are so certain that an attempt to evade taxes — otherwise known as tax evasion — is a crime with potentially significant consequences.

Types of tax evasion

Tax evasion refers to the intentional and unlawful underpayment or failure to pay taxes.

Common forms of tax evasion include underreporting income, inflating deductions or falsifying financial records. Using offshore accounts to hide interest income or paying employees cash to avoid payroll taxes are other forms of tax evasion.

Tax evasion must be intentional

Honest mistakes or misunderstandings about tax liabilities is not tax evasion. Rather, the criminal act of tax evasion requires a person knowingly and intentionally try to avoid paying taxes.

If, for example, you honestly rely on advice from your tax preparer or genuinely misunderstand a tax rule, that is not a crime. You may owe back taxes and penalties, but you lack intent to unlawfully evade taxes and therefore are not guilty of a crime.

What to do if accused of tax evasion

If you find yourself accused of tax evasion or are the subject of an investigation, you should immediately consult a qualified criminal attorney.

An attorney can work with IRS or state investigators to try resolving any issues in a way that avoids criminal charges. An attorney can also advise you regarding your rights and assist with presenting the best defense possible to any accusations.

Remember, to prove tax evasion, the government generally must establish beyond a reasonable doubt that you intended to unlawfully evade taxes.