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Every year, the Internal Revenue Service (IRS), and the State of California, criminally prosecute tax crimes via the Department of Justice or a California District Attorney, respectively, which frequently leads to criminal tax convictions, fines, restitution, and harsh prison sentences. Many of these criminal tax cases revolve around tax evasion or attempted tax evasion, which is illegal under 26 U.S. Code § 7201 (attempt to evade or defeat tax) or via similar provisions found in California’s Revenue and Taxation Code. Tax evasion may involve federal income tax evasion, California income tax evasion, employment tax evasion, or other attempts to avoid reporting and paying taxes upon earnings and assets. However, there is one trait all tax evasion cases share in common: the potential to end in legal, professional, and financial disaster for the accused and or convicted tax offender.
It is impossible to overstate the importance of obtaining skilled and aggressive legal representation if you or one of your family members is selected for, or is under, audit or criminal tax investigation, or has been accused of tax evasion in San Bernardino or the surrounding area. The San Bernardino tax evasion defense attorneys at the Tax Law Office of David W. Klasing have been representing individuals, married couples, retirees, business owners, military servicemembers, and other taxpayers in tax evasion cases since the firm’s inception back in 2009, enabling us to deliver the informed, sophisticated counsel you require. We can work to minimize the penalties you face, educate on your responsibilities and options for reentering compliance, such as a making a voluntary disclosure, and protect your legal rights when dealing with tax authorities, such as the IRS or, California Department of Tax and Fee Administration (CDTFA), formerly known as the BOE, California Employment Development Department and the California Franchise Tax Board (FTB). To discuss how we may be able to assist you in a confidential, reduced-rate consultation, contact us online, or call us at (909) 991-7557 or (800) 681-1295 today.
What Constitutes Willful Tax Evasion?
Most tax evasion cases involve federal income taxes. However, as noted above, tax evasion charges may also arise from state income tax, employment tax, payroll tax, sales tax, estate tax, or other types of IRS or state requirements for employers, business entities, homeowners, property owners, or individuals. The act may involve:
- Attempting to evade the assessment of tax, which means purposefully self-reporting a tax liability that is lower than it should truly be.
- Attempting to evade the actual payment of tax.
Tax evasion is a broadly-defined offense which occurs when a taxpayer takes any intentional action, or series of actions, to avoid full and timely payment of his or her tax liability. There are numerous ways in which a taxpayer may attempt to accomplish this, with some common examples including:
- Improperly claiming tax credits (such as the Foreign Tax Credit) or tax deductions (such as the Home Office Deduction) for which the taxpayer is not actually eligible.
- Underreporting income, or omitting income from a return altogether.
- Concealing assets or sources of income from the IRS or a California taxing authority in a collection action by lying on a collection information statement or to a collection officer directly.
A crucial element of tax evasion is that the taxpayer acted willfully, meaning his or her actions, like those listed above, were deliberate and calculated. The IRS describes such actions as “affirmative acts,” meaning “deceit, subterfuge, camouflage, concealment, attempts to color or obscure events, or make things seem other than they are.” If the taxpayer’s error was not intentional – a common occurrence, considering the innumerable complexities of the Internal Revenue Code (IRC) – the taxpayer has not committed criminal tax evasion, but may nonetheless be subject to costly civil negligence penalties.</p.
Helpful Criminal Tax Q and A library: Criminal Tax
What is the Penalty for Tax Evasion?
As is true of most federal crimes, the penalty for tax evasion – which is always a felony offense – can be severe. If the defendant is convicted or pleads guilty, not only may he or she be sentenced to federal prison for a number of months or years, but further, is likely to be heavily fined. Depending on the scope of the offense and resulting tax loss to the government, the taxpayer could be ordered to pay thousands or even millions of dollars to the IRS in restitution. Once tax fraud is proven, the statute of limitations becomes open back to the dawn of time to go back and recoup civilly ANY prior tax fraud.
As though prison time and restitution were not enough to contend with, the taxpayer may also be placed on supervised release upon completing his or her sentence. Similar to a parolee or probationer, the taxpayer must comply with specific court orders, restrictions, and requirements during the release period.
Penalties for tax evasion are outlined under 26 U.S. Code § 7201. In accordance with the statute, the taxpayer may be:
- Sentenced to a maximum of five years in federal prison.
- Ordered to pay a fine of up to $100,000, $500,000 if a Corporation.
Keep in mind that the statutory fine is separate from restitution, meaning the taxpayer can be ordered to pay IRS restitution in addition to being fined under the statute.
Once penalties have subsided, the taxpayer will be left with a felony criminal record. This can have disastrous consequences for employment options, housing options, international travel, gun ownership, military service, federal benefits, and many other rights and privileges including the loss of California Licensure if licensed under California’s Business and Professions code via a professional discipline action.
Contact Experienced San Bernardino, CA Tax Evasion Lawyers if You Are Being Audited
Regardless of the amount involved, tax evasion is a serious criminal offense. If you have been selected for an IRS audit, FTB audit, or eggshell audit, have been contacted by IRS agents or federal investigators, or if you simply have doubts, questions, or concerns about information you may have supplied or failed to supply on previous tax returns, the wisest and most efficient course of action is to discuss the issue with a knowledgeable, trustworthy San Bernardino tax evasion lawyer with a proven track record of obtaining results.
At the Tax Law Office of David W. Klasing, our attorneys have decades of experience handling tax controversy matters in San Bernardino, and are ready to provide the zealous, around-the-clock guidance you need. To arrange a reduced-rate tax consultation, contact the Tax Law Office of David W. Klasing online, or call our law offices at (909) 991-7557 or (800) 681-1295.
San Bernardino Tax Law Offices
For any of your tax planning compliance and controversy needs in San Bernardino, contact the Lawyers at The Tax Law Offices of David W. Klasing today. Our experienced Tax Lawyers offer a reduced-rate consultation on new cases or engagements. Call 909-991-7557 or 800-681-1295 or contact us online today to schedule a reduce rate initial consultation at our San Bernardino tax law offices, or at one of our other convenient locations across Southern California.
