Explaining Tax Evasion

Tax evasion refers to illegally avoiding paying taxes, failing to report income, or reporting inaccurately. Any effort not to pay taxes by illegal means would fall under the category of tax evasion. People who are guilty of tax evasion are subject to criminal prosecution and substantial penalties. If you are convicted of tax evasion, you can face up to 5 years in prison and steep fines (100,000 for personal and 500,000 for corporations). If you are under investigation for tax evasion, contact a Los Angeles federal criminal defense attorney for help.

Tax evasion is a federal offense under both federal and state statutes. Failure to file a federal tax return is a misdemeanor offense, however if a person has a pattern where they failed to file their tax returns for several years, and if there is evidence supporting that the repeated failure to file was part of a scheme to avoid paying taxes, then the violator can be charged with a felony under section 7201 of the Internal Revenue Code.

Tax Avoidance versus Tax Evasion

Tax avoidance is the legal utilization of the system to one’s own advantage, to reduce the amount of tax that is payable by means that are well within the law. Writing off a dinner out with co-workers, or purchasing flowers for a spouse on a company credit card and later writing them off would be good examples. Tax avoidance can be abused to an extent, where one exploits the loopholes in the law. All American citizens have the legal right to reduce the amount of taxes that they pay, as long as they do so by legal means. When people underreport their income, or avoid reporting a profit, while pocketing the proceeds, then they are guilty of tax evasion.

In order for you to be convicted of tax evasion, there are two elements which will have to be proved. (1) That you owed a significant amount of income tax on top of what you declared on your returns, and (2) That you knowingly and willfully attempted to evade paying taxes. Essentially, the prosecution has to prove that you had a substantial amount of taxable income, which you attempted to avoid paying, or a substantial portion thereof, by failing to report all of the income which you knew you had for that year.

Tax Evasion Defense Lawyer in Los Angeles

If you are under investigation for tax evasion, contact a Los Angeles tax evasion defense attorney from Kaye, McLane & Bednarski, LLP right away!

Contact a Los Angeles tax evasion defense lawyer from our firm for a free initial consultation.