How Does the IRS Determine Tax Evasion in Washington DC?
Do I need a tax fraud attorney or was it a simple mistake?By S.M. Oliva | Last updated on January 29, 2023
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“Willfully” Avoiding Assessment or Payment of TaxesThe federal tax code states it is a crime to “willfully” attempt to “evade or defeat any tax” required by law. Anyone who is charged, tried, and convicted of such tax evasion or tax crimes may serve a prison sentence for up to five years or fined up to $100,000. In the case of a corporation, the business can be fined up to $500,000. The key word here is “willfully.” The government must prove the taxpayer intentionally tried to underpay or avoid taxable income. An honest mistake is therefore not criminal tax fraud. Of course, even a mistake must be corrected—that is, the taxpayer may need to file an amended return and pay any additional tax owed. But a taxpayer cannot be criminally convicted of fraud unless there is evidence of intent. Like filing a false return. If you are contacted by the IRS, you should contact a law firm with a qualified DC white collar criminal defense lawyer as soon as possible. Here are some of the more common scenarios where a taxpayer may be guilty of criminal tax evasion:
- The taxpayer deliberately fails to report income or omits the amount of income from their tax return. This often occurs in businesses that deal heavily in cash. For example, a restaurant server at a may deliberately fail to report all of their cash tips.
- The taxpayer claims ineligible or inaccurate deductions for a tax year. For instance, if you falsely claim someone as a child or dependent to gain an additional deduction, that would be fraud.
- Along similar lines, if the taxpayer is self-employed and required to file a Schedule C with his Form 1040, it would be fraudulent to claim personal expenses as business deductions.
Do Not Panic: Speak with a LawyerMany DC residents panic when they realize they made a mistake on their tax return or do not have enough money to pay their bill. But remember, the burden of proof is on the government to prove you committed criminal tax evasion. Nevertheless, if you are concerned about the possibility of criminal charges, you should speak with a qualified DC white collar criminal defense attorney or tax attorney right away. For more information on this area of law, see our overviews of white collar crime, criminal defense and federal crimes.
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