Learn About Tax Evasion Crimes

by lawfirm on November 20, 2012

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It is the duty of every citizen to pay their taxes on time every year. Paying taxes is necessary for all and failing to do so can have serious consequences. When an individual uses illegal means to avoid paying taxes, it is considered to be a crime that is known as tax evasion. Any attempt of avoiding the payment of taxes may be seen as your attempt at evading taxes. Tax evasion is a serious criminal activity and if you are found to be guilty of committing this crime, you will have to face harsh penalties and punishments. Businesses and citizens have the right to decrease their tax liability using legal means such as charitable contributions and tax deductions. However, when illegal means are used for the same purpose, it is considered to be a tax crime.

Types: This crime may be committed in a number of ways. Different actions may be considered as tax evasion. Some of these actions may include things like reporting less than what you actually earn, not reporting cash income, hiding capital in foreign account, claiming tax deductions in an improper manner, and so on. If you took an unauthorized deduction on a particular business tax return, or falsely claimed or exaggerated charitable deductions, it would be considered as tax evasion. Other examples may include, omitting properties, filing false tax returns, underreporting the value of an asset and overestimating the value of a property that has been donated to charity.

Investigations: The IRS (Internal Revenue Service) will notify the taxpayer of the suspected criminal behavior. The suspect may receive a notification letter, phone call or even a personal visit. Once the suspect is notified, IRS agents may impose penalties right away or may have the Criminal Investigation Division (CID) begin an investigation. A thorough investigation will be carried out by the CID and they may even contact the suspect’s family, friends, co-workers, employers and neighbors. If you are a suspect, you should be aware that the CID has the right to tap your phone for tracking money that has been moved to an offshore account. You cannot be proven guilty unless the facts found in investigation declare that you owed a significant amount of taxes and you knowingly tried to evade or defeat it.

Prosecution: Three types of crimes can be charged against businesses or citizens that are guilty of evading taxes. This is a broad category and may include any action that has intent of cheating on the taxes that you owe to the government. This crime is a felony and may carry prison term of up to five years and/or $250,000 as fines. The amount of fines will be increased to $500,000 for businesses. If you are found to be guilty of filing false tax return, you may face jail term of up to 3 years and/or $250,000 ($500,000 for businesses). Not filing a tax return is considered to be least serious of the three different types. In this case you may face prison term of 1 year and fines of $100,000 which goes up to $200,000 for businesses.

If you have been charged with a serious tax crime, it would be necessary for you to contact a lawyer as soon as you can.

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