by steve | Aug 5, 2011 | IRS Tax Advice, Representation
The main difference is jail time.
Read below to learn the aspect of the criminal and civil definitions.
26 USC §7201 – Attempt to Evade or Defeat Tax
Title 26 USC §7201 prohibits willfully attempting in any manner to evade or defeat any tax or the payment thereof.
Under 26 USC §7201, a violation of the statute is punishable by a maximum fine of $100,000 ($500,000 in the case of a corporation), or imprisonment of not more than five years, or both, together with the costs of prosecution. However, the criminal fine provisions under 18 USC §3571 increase the maximum permissible fines for a violation of 26 USC §7201 to not more than $250,000 for individuals and $500,000 for corporations. Alternatively, if any person derives pecuniary gain from the offense, or if the offense results in pecuniary loss to a person other than the defendant, the defendant may be fined not more than the greater of twice the gross gain or twice the gross loss.
9.1.3.3.2.1 (05-15-2008)
26 USC §7201 – Avoidance Distinguished from Evasion
Avoidance of taxes is not a criminal offense. Any attempt to reduce, avoid, minimize, or alleviate taxes by legitimate means is permissible. The distinction between avoidance and evasion is fine, yet definite. One who avoids tax does not conceal or misrepresent. He/she shapes events to reduce or eliminate tax liability and, upon the happening of the events, makes a complete disclosure. Evasion, on the other hand, involves deceit, subterfuge, camouflage, concealment, some attempt to color or obscure events or to make things seem other than they are. For example, the creation of a bona fide partnership to reduce the tax liability of a business by dividing the income among several individual partners is tax avoidance. However, the facts of a particular investigation may show that an alleged partnership was not, in fact, established and that one or more of the alleged partners secretly returned his/her share of the profits to the real owner of the business, who, in turn, did not report this income. This would be an instance of attempted evasion.
by steve | Dec 14, 2010 | IRS Tax Audit, Payroll Tax Audits, Representation
IRS Payroll Tax Audit – Professional Audit Tax Help – Fresh Start Tax – Miami, Ft.Lauderdale, West Palm
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Former IRS Agents, Managers .
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Our tax practice is dedicated to IRS Representation. Our tax professionals have been serving the South Florida area since 1982. We are comprised of Former IRS agents ,managers and instructors along with Board Certified Tax Attorney’s and CPA’s. We have 205 years of direct IRS experience.
As former IRS agents we use to audit companies for payroll tax audits. We know all the tax strategies for the very best resolution.
How IRS makes their determinations:
To determine whether a worker is an independent contractor or an employee under common law, you must examine the relationship between the worker and the business. All evidence of control and independence in this relationship should be considered.
The facts that provide this evidence fall into three categories – Behavioral Control, Financial Control, and the Relationship of the Parties.
Behavioral Control.
covers facts that show whether the business has a right to direct or control how the work is done, through instructions, training, or other means.
Financial Control.
covers facts that show whether the business has a right to direct or control the financial and business aspects of the worker’s job.
This includes:
* The extent to which the worker has unreimbursed business expenses
* The extent of the worker’s investment in the facilities used in performing services
* The extent to which the worker makes his or her services available to the relevant market
* How the business pays the worker, and
* The extent to which the worker can realize a profit or incur a loss
Relationship of the Parties covers facts that show how the parties perceive their relationship. This includes:
* Written contracts describing the relationship the parties intended to create,
* The extent to which the worker is available to perform services for other, similar businesses,
* Whether the business provides the worker with employee-type benefits, such as insurance, a pension plan, vacation pay, or sick pay,
* The permanency of the relationship, and,
* The extent to which services performed by the worker are a key aspect of the regular business of the company
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