What is tax evasion? A recent case provides an example.

The Department of Justice (DOJ) recently announced the arrest, conviction and sentencing of a former Internal Revenue Service (IRS) employee. The crime: tax evasion.

What is tax evasion?

Tax evasion is more than just a simple mistake on one’s tax returns. When the government accuses a taxpayer of this crime, they are accusing the person of deliberately avoiding their tax obligations.

There are generally two forms of tax evasion: a failure to assess or take the action needed to determine the taxpayer’s tax obligations and a failure to pay the taxpayer’s tax obligation. Examples can include a failure to file tax returns, overestimating deductions on one’s tax returns, keeping false financial records and destroying records.

If convicted, the penalties are serious. They can include hundreds of thousands of dollars in fines and prison time.

How does the government establish tax evasion?

To show a taxpayer has committed tax evasion, the government must generally establish a taxpayer attempted to avoid an owed tax. This crime also requires the element of willfulness. The government must show the taxpayer acted to intentionally avoid their taxes. An honest mistake does not rise to the level of tax evasion.

What happened to the former IRS agent?

The DOJ claimed the former agent evaded his tax obligations and worked to obstruct IRS efforts to collect those taxes. The prosecution provided evidence the agent filed tax returns for 1993 through 2015 but did not pay the income taxes reported on the tax filings. The government further claimed the agent acted to hide his income to avoid paying his taxes.

Ultimately, a jury convicted the man of both offenses. The court ordered the former agent to pay $923,666.73 in restitution and sentenced to 32 months imprisonment.

What if I am accused of tax evasion?

It is important to take the matter seriously. Defenses are available. An attorney experienced in tax law can review the allegations and work to build a defense to better ensure your rights are protected.

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