Tax evasion is the very general term for when individuals, corporations, trusts and other entities illegally evade taxes. Tax evasion entails a taxpayer deliberately misrepresenting or concealing the true state of their affairs to reduce their tax liability. It includes but is not limited to dishonest tax reporting, such as declaring less income profits or gains than actually earned or overstating deductions.
As Former IRS Agents we have seen our fair share of tax fraud over our 60 years of working in the local, district and regional offices of the Internal Revenue Service.
If you think you may be in jeopardy call us today.
Although this is not an all inclusive list the following can qualify as tax fraud under federal tax law:
• Deliberately underreporting or omitting income that should be taxable
• Willfully overstating the amount of tax deductions to evade taxes
• Keeping two sets of books and records
• Making false entries in books and records to deliberately evade paying taxes
• Claiming personal expenses as business expenses
• Claiming false deductions
• Hiding or transferring assets or income
• Non reporting of cash income
• Using offshore accounts to hide income
IRS Criminal Investigation is comprised of approximately 4,100 employees worldwide, approximately 2,700 of whom are Special Agents whose investigative jurisdiction includes tax, money laundering and Bank Secrecy Act laws.
While other U.S. federal agencies also have investigative jurisdiction for money laundering and some bank secrecy act violations, IRS is the only federal agency that can investigate potential criminal violations of the Internal Revenue Code.
Compliance with the federal tax laws in the United States relies heavily on self-assessments of what tax is owed. This is called voluntary compliance system. When individuals and corporations make deliberate decisions to not comply with the law, they face the possibility of an IRS civil audit or IRS criminal investigation, which could result in prosecution and possible jail time. IRS loves to publicize conviction tax thieves because it enhances voluntary compliance.
Criminal Investigators (special agents) fill a unique niche in the federal law enforcement community. Due to the increased use of automation for financial records, Criminal investigators / Special Agents are trained to recover computer evidence along with their financial investigative skills. These Special Agents use specialized forensic technology to recover financial data that may have been encrypted, password protected, or hidden by other electronic means.
Criminal Investigation’s conviction rate is one of the highest in federal law enforcement. Not only do the courts hand down substantial prison sentences, but those convicted must also pay fines, civil taxes and penalties.
Attempt to evade or defeat tax
Any person who willfully attempts to evade or defeat any tax imposed by this title or the payment thereof shall, in addition to other penalties provided by law, be guilty of a felony, and upon conviction thereof:
Willful failure to collect or pay over tax
Any person required under this title to collect, account for, and pay over any tax imposed who willfully fails to collect or truthfully account for and pay over such tax shall, in addition to penalties provided by the law, be guilty of a felony:
Willful failure to file return, supply information, or pay tax
Any person required under this title to pay any estimated tax, make a return, keep any records, or supply any information, who willfully fails to at the time required by law, shall, in addition to other penalties provided, be guilty of a misdemeanor, and upon conviction thereof:
Fraud and false statements
Any Person who willfully makes and subscribes any return, statement, or other document, which contains a written declaration that is made under the penalties of perjury, and which he does not believe to be true and correct as to every material matter; shall be guilty of a felony, and upon conviction thereof:
Fraud and false statements
Any person who willfully aids or assists in, or procures, counsels, or advises the preparation or presentation of a return, affidavit, claim, or other document, which is fraudulent or is false as to any material matter, whether or not such falsity or fraud is with the knowledge or consent of the person authorized or required to present such return, affidavit, claim, or document; shall be guilty of a felony and, upon conviction thereof:
Attempts to interfere with administration of Internal Revenue laws
Whoever endeavors to intimidate or impede any officer or employee of the United States acting in an official capacity under this title, or in any other way corruptly or by force obstructs or impedes, or endeavors to obstruct or impede, the due administration of this title, upon conviction:
Conspiracy to commit offense or to defraud the United States
If two or more persons conspire either to commit any offense against the United States, or to defraud the United States, or any agency thereof in any manner or for any purpose, and one or more of such persons do any act to effect the object of the conspiracy, each: