What You Need to Know About Tax Evasion

an accountant reviewing for tax evasion

As many people know, tax laws in the United States can be extremely complicated. It’s not uncommon for people to make honest mistakes on their taxes, although it can be stressful to find out you did something incorrectly. However, if you’re accused of committing tax evasion, you need to be concerned about your future and the consequences this can have. If you’ve been accused of committing this crime, you likely have many questions and concerns.

Let the Scranton white collar crime attorneys at Mazzoni Karam Petorak & Valvano help you understand more about what it means to be charged with tax evasion.

What is Tax Evasion?

Tax evasion is an illegal activity where a person willfully attempts to avoid paying their taxes. This can include avoiding paying one’s taxes altogether or attempting to pay less than what they owe. Both individuals and businesses can commit this act.

How Does Tax Evasion Differ from Tax Avoidance?

Tax evasions and tax avoidance may seem similar, but there are serious differences between the two. When a person commits tax evasion, they intentionally use illegal methods to get out of paying what they owe in taxes. However, tax avoidance is when a person uses legal methods to reduce the amount of taxes they owe.

Types of Tax Evasion

According to the IRS, there are two different forms of tax evasion – evasion of assessment and evasion of payment.

Evasion of Assessment

Evasion of assessment occurs when a person willfully attempts to keep the IRS from determining how much they owe in taxes. This involves acts that are intended to mislead or conceal information. Some ways that evasion of assessment can occur includes:

  • Filing a false return or false amended return
  • Overstating deductions
  • Concealing bank accounts
  • Filing false W-4s while failing to file a return
  • Making false statements to treasury agents
  • Diverting corporate funds to pay for personal expenses
  • Holding property in a nominee’s name

Evasion of Payment

Evasion of payment typically occurs after the taxpayer is made aware that the tax is owed and involves concealing or removing assets that can be used to pay the tax. This involves more than just failing to pay the tax. Some methods or evasion of payment include:

  • Concealing assets by using another person’s bank account
  • Only using cash and other people’s credit cards, as well as placing assets under another person’s name
  • Making false statements that they owned no real estate and had no other assets to pay the tax
  • Not having credit cards, bank accounts, accounting records, or attachable assets

What Penalties are There for Tax Evasion?

Tax evasion of any kind can have extreme consequences. Because of the penalties, it’s important that you have an experienced attorney on your side to defend you. The penalties a person may receive for these charges varies depending on their unique circumstances, but common penalties include:

  • Penalty payments
  • Paying interest on the amount you owe
  • Liens on your property
  • Seizure of property
  • Criminal charges
  • A prison sentence

Contact a White Collar Crime Attorney Who Can Handle Your Case

Tax evasion is a serious offense, and if this is something you’re going through, you can’t face criminal court without the right legal help. Cases like these are complex, but Mazzoni Karam Petorak & Valvano has experience working with those facing charges. Our Scranton white collar criminal defense attorneys have what it takes to help you receive a favorable outcome. Contact us to schedule a free consultation today to learn more.

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