Four examples of evidence used to build a tax evasion case

On Behalf of | Apr 9, 2020 | Criminal Tax Issues

The Internal Revenue Service (IRS) generally looks for more than a failure to file tax returns when building a criminal tax evasion case. In most cases, these allegations require the prosecution establish intentional steps taken to avoid one’s tax obligations. Some examples of actions the IRS pursue include:

  • Keeping two sets of books for accounting purposes
  • Making alterations or false entries to financial records
  • Concealing assets or income
  • Making financial transactions in a way deliberately intended to avoid reporting

Furthermore, the Supreme Court of the United States has stated that any act where the “likely effect of which would be to mislead or to conceal” information from the IRS constitutes an affirmative willful attempt to evade one’s tax obligations.

Does that mean a mere failure to file will not lead to criminal charges?

It is important to clarify that an intentional failure to file taxes is illegal and the IRS will still pursue charges. It is just more likely the charges will result in a misdemeanor as opposed to a felony conviction which can lead to a different set of penalties. Although both can lead to prison time, the penalties increase in severity when the prosecution can establish the accused took affirmative actions to avoid filing. This is particularly true if the prosecution can show the accused took these steps on a regular basis.

What if a taxpayer is concerned about compliance with applicable tax laws?

In general, the IRS is focused on compliance. As a result, there are many programs designed to help better ensure taxpayers can come into compliance with their tax obligations. The attorneys at Goldburd McCone are familiar with these options. They can review your situation and provide counsel on the best way to come into compliance while mitigating the risk of criminal charges.