FELONY TAX EVASION
The United States Government enforces the tax laws through comprehensive criminal tax statutes. The crime of tax evasion involves the intentional failure to report income and/or the improper claiming of tax deductions. Charges typically result from:
- the failure to report cash income;
- deducting personal expenses on a business return;
- concealing income;
- falsely claiming charitable deductions;
- inflating charitable deductions;
- submitting false information on your return;
- failing to report foreign income;
- failing to file a return;
- keeping a double set of books.
Willful Tax Evasion
The key to defending any tax evasion case is proving that you did not intentionally make a material misrepresentation or attempt to deceive the IRS to reduce your tax liability. To be found guilty of tax charges, the Government must present proof of “willful conduct.” This means that there must be an “intentional violation of a known legal duty.”
Tax Evasion Penalties
The failure to file a tax return is a misdemeanor punishable by a fine of up to $25,000.00 (up to $100,000.00 for corporations). While a misdemeanor charge is scary enough, the IRS can convert it to a felony charge. To convert your charge to a felony, all the IRS needs is a good faith belief that you voluntarily and intentionally failed to file.
The consequences of a felony tax charge include a fine of up to $100,000.00 for an individual (and up to $500,000.00 for a corporation). Government prosecutors have significant discretion when it comes to indicting a person for felony tax evasion. Because the potential for large fines and jail time, it is important to retain an experienced attorney as soon as possible.
If your IRS agent suspects that you have engaged in fraud, additional penalties may result, or even worse the case can be referred to the IRS Criminal Investigation Division (CID). Once the CID becomes involved, investigators may contact your friends, employer, co-workers, bankers and spouse, in an effort to gather evidence against you.
If the decision to prosecute has been made, the chances of a conviction are approximately 80%. Close to half of those convicted will actually be incarcerated. Therefore, you should immediately retain an experienced attorney if you learn that you are the subject of a CID investigation.
If you hire a lawyer before you are indicted, there may be an opportunity to confer with the government to avoid having the charges presented to a Grand Jury. While it is difficult to avoid prosecution if the IRS believes it has a strong case, where appropriate we will work with you to show that your situation involves a misunderstanding of tax law rather than any willful violation.
Accountants can also be charged with a felony for aiding and assisting the taxpayer to obstruct or impede the due administration of tax enforcement. If you are an accountant in Mississippi and learn that you are the subject of a potential IRS criminal investigation, call us to set up an initial consultation.
Statute of Limitations
There is a six-year statute of limitations for filing criminal charges based on failing to file a tax return. There is no limitation on how long the IRS can demand payment of taxes owed on non-filed returns. Therefore, it is almost always better to voluntarily file a return than simply ignore your legal duty.
Protecting Mississippi Taxpayers
If you are facing federal tax evasion charges, the deck is stacked against you. The Federal Government has virtually unlimited resources to prosecute the claims. They can charge multiple counts to drive up the potential consequences to you. This makes choosing the right lawyer one of the most important choices you will ever make.
For experienced legal counsel, contact us online or call us at 601-957-3101.