Top Phoenix, AZ Federal Tax Evasion Lawyers Near You

What Are Examples of Tax Evasion?

Tax evasion is the willful attempt to evade or defeat taxes. Federal tax evasion is a serious criminal offense, with the possibility of jail time and severe financial penalties. The elements of tax evasion under the U.S. Code include showing that the defendant:

1. Had a substantial income tax deficiency;
2. Made an affirmative attempt to evade or defeat the assessment or payment of the income tax; and
3. Acted willfully.

Tax evasion generally involves evasion of tax assessment or evasion of tax payment. Tax assessment evasion may involve false tax filings to reduce apparent tax liability, including:

• Underreporting of income
• Misrepresentations on a federal tax return
• Accounting fraud to avoid taxes
• Overstatement of deductions

Tax payment evasion involves trying to conceal available money to pay assessed taxes. Common examples of evasion of tax payments include:

• Concealing money in offshore accounts
• Putting assets in the name of others
• Making deposits in the name of family members

How Long Does It Take the IRS to Investigate Tax Evasion?

The Internal Revenue Service (IRS) Criminal Investigation Division conducts tax evasion investigations. Investigations begin with information from revenue agents or officers who suspect possible fraud. Information about tax evasion can also come from whistleblowers who can get a reward for reporting tax evaders. Tax evasion may also be uncovered as part of other federal crimes, including white collar crimes.

Next, special agents analyze data to determine if there is evidence of a financial crime, including tax evasion or tax fraud. After a preliminary investigation, investigators determine if there is enough evidence to begin a criminal investigation. IRS investigators may interview witnesses, review financial data, review bank records, and use search warrants to collect evidence. Based on the evidence, the special agent may recommend prosecution.

IRS investigations can take from a few months to a few years. More complex tax evasion cases may take longer, including cases with multiple defendants, a tax evasion scheme, organized crime, and cases with a long history of multiple years of tax evasion.

Can I Go to Jail for Making a Mistake on My Taxes?

Tax evasion generally requires a willful intent to defraud the federal government. A mistake on your tax return should not be enough for prison time. You will still be liable for the unpaid taxes, including any penalties or assessments. However, the prosecutor can still proceed with a tax evasion criminal charge if they suspect the mistake was done willfully and intentionally.

Do You Go to Jail for Tax Evasion?

Federal tax evasion is a felony crime. A criminal conviction for tax evasion provides for a jail sentence of up to 5 years in federal prison. Other criminal tax fraud charges may also involve prison time.

However, you may still be able to avoid jail time after a tax evasion conviction. Federal sentencing guidelines provide a sentencing range, with adjustments available for aggravating or mitigating factors. A federal judge could lower the sentencing level if the defendant clearly demonstrates acceptance of responsibility or was a minor participant in any criminal activity.

What Happens If You Are Found Guilty of Tax Evasion?

If you are found guilty of tax evasion, you may be sentenced to jail time and fines. However, the IRS tax code also provides for civil penalties. The IRS can impose a fraud penalty of an additional 75% of the underpayment. For example, tax evasion of 1 million dollars could include an additional penalty of $750,000, for a total of 1.75 million dollars owed.

How Long Can the IRS Come After You?

In most cases, the IRS will only audit tax returns going back 3 years. However, the IRS can go back 6 years to audit a taxpayer where there is a substantial error. In the case of fraud, there is no time limit. If a taxpayer has committed fraudulent tax evasion, the IRS can come after the taxpayer for unpaid taxes and penalties years or decades later.

Should I Talk to IRS Agents?

Federal tax agents may contact taxpayers to get clarification on a tax return. This may include questions about the tax treatment or a request for additional documentation. Getting a letter from the IRS can be alarming, even if you didn’t do anything wrong. In some cases, a basic response may clear up the tax question with no further issues.

However, if you suspect the IRS may be conducting a tax evasion investigation or you believe there were problems with your prior tax returns, you may want to talk to a federal tax fraud attorney first. Many people talk to IRS agents even if they don’t think they should, just because they are concerned that getting a tax fraud lawyer will make them appear guilty.

Do I Need a Tax Evasion Attorney?

Tax attorneys can provide more than a criminal defense. A defense attorney can represent you before the IRS so you do not end up saying something that could be used against you. Criminal defense attorneys can also negotiate with the IRS to agree to a tax repayment plan, even without having any criminal charges filed.

If federal tax fraud charges are filed, federal tax fraud lawyers can negotiate with the Justice Department or United States Attorney for a plea agreement. A plea deal may allow you to avoid the harshest penalties, reduce civil liability, and even avoid jail time. If you want to fight the charges of tax fraud, your criminal defense lawyer can build a strong legal defense.