Awards & Recognition
The Tax Law Offices of David W. Klasing
San Diego Tax Evasion Defense Attorney + CPA
The San Diego tax attorneys at the Tax Law Office of David W. Klasing have extensive experience representing taxpayers who are at risk of being charged with felony tax evasion or other tax fraud offenses. Our award-winning CPAs, CPA candidates and criminal tax defense attorneys have advocated fiercely on behalf of the clients we represent, in the process earning a reputation for zealous and effective legal representation. Whether we are fighting for reduced penalties, presenting evidence that attests to non-willful conduct, disputing whether the IRS acted properly, or exploring other approaches to the case, our tax evasion defense lawyers never stop working to protect our clients’ best net worth and liberty.
What is Considered Tax Evasion?
It is important to have a basic understanding of the crime you are at risk of being accused of committing. “Tax fraud” is a broad term that covers a range of tax crimes, which all share one trait in common: all were committed intentionally, or “willfully,” so that the taxpayer could avoid paying his or her true tax liability.
In comparison, the term “tax evasion” refers to a specific set of crimes, defined at 26 U.S. Code § 7201 as the willful attempt “to evade or defeat any tax” imposed under the Internal Revenue Code. It most commonly is charged in connection with the assessment phase of an income taxation case but can also be charged during the collection phase of a tax case. While “tax evasion” technically refers to this specific offense, the term is often used to describe acts of tax fraud in a general sense.
Examples of Tax Fraud
As noted above, tax evasion is a type of tax fraud criminalized under 26 U.S. Code § 7201. However, tax evasion is not the only type of tax fraud that can lead to criminal charges for a taxpayer. Other illegal tax acts include the following:
- 26 U.S. Code § 7202 – Willful failure to collect or pay over tax
- 26 U.S. Code § 7203 – Willful failure to file return, supply information, or pay tax
- 26 U.S. Code § 7206 – Fraud and false statements
- 26 U.S. Code § 7206(1) – Making or subscribing a false return or document
- 26 U.S. Code § 7206(2) – Aiding or assisting a false return
- 26 U.S. Code § 7207 – Fraudulent returns, statements, or other documents
Actions that could potentially give rise to these or related charges include:
- Altering or destroying tax or business records
- Concealing taxable income or assets from the IRS, including offshore income or foreign bank accounts
- Improperly claiming tax credits or deductions the taxpayer was ineligible to receive
- Using stolen personal information to prepare tax returns
- Willfully failing to file tax returns
- Willfully failing to pay taxes
Is Tax Evasion a Felony?
Tax evasion is a felony offense under 26 U.S. Code § 7201. The other crimes listed above are graded as follows:
- 26 U.S. Code § 7202 – Felony
- 26 U.S. Code § 7203 – Misdemeanor
- 26 U.S. Code § 7206 – Felony
- 26 U.S. Code § 7207 – Misdemeanor
Tax Evasion Penalties: Jail Time and Fines
According to the United States Sentencing Commission, “The average sentence length for tax fraud offenders was 17 months” for tax offenders who were sentenced during 2017. The criminal penalties for different tax offenses are set forth in their corresponding statutes, as listed below.
Criminal Penalty for Tax Evasion
The statutes listed above establish the maximum penalties for misdemeanor and felony tax offenses. Judges, however, may impose lesser or greater penalties if determined to be appropriate. The maximum federal jail sentences and criminal fines for tax evasion and related crimes are as follows: Note: each count carries with it the following potential sentences. The government will often hold such a significant amount of potential jail time in front of an investigated / indicted taxpayer that most criminal tax cases never go to trial but are instead resolved via plea bargaining. Many criminal actions of taxpayers can and do violate several of the statutes below simultaneously.
- 26 U.S. Code § 7201
- Fine – Up to $100,000
- Sentence – Up to 5 years
- 26 U.S. Code § 7202
- Fine – Up to $10,000
- Sentence – Up to 5 years
- 26 U.S. Code § 7203
- Fine – Up to $25,000
- Sentence – Up to 1 year
- 26 U.S. Code § 7206
- Fine – Up to $100,000
- Sentence – Up to 3 years
- 26 U.S. Code § 7207
- Fine – Up to $10,000
- Sentence – Up to 1 year
Note that these penalties may be increased for corporate tax offenders. For example, the $100,000 criminal fine for tax evasion, which applies to individual defendants, quintuples to $500,000 for corporate tax evaders.
Civil Fraud Penalties
A costly civil fraud penalty may be imposed before or after criminal charges are filed or contemplated against the taxpayer. This civil fraud penalty is equivalent to 75% of the underpayment. In addition, the taxpayer will also be required to pay interest that has accrued since the original filing date of the returns at issue.
San Diego Tax Evasion Defense Lawyers and CPAs
If you are at risk of being charged with tax evasion or a related tax offense, you need to begin planning your defense strategy as soon as possible. The Department of Justice is aggressive and diligent when it comes to prosecuting suspected tax offenders, with prosecutors often obtaining lengthy sentences and harsh penalties for defendants who are convicted. Merely being investigated by the criminal investigation division will result in an over 90% probability of a criminal tax conviction.
San Diego Tax Evasion Defense Lawyers and CPAs
If you are at risk of being charged with tax evasion or a related tax offense, you need to begin planning your defense strategy as soon as possible. The Department of Justice is aggressive and diligent when it comes to prosecuting suspected tax offenders, with prosecutors often obtaining lengthy sentences and harsh penalties for defendants who are convicted. Merely being investigated by the criminal investigation division will result in an over 90% probability of a criminal tax conviction.
To discuss your tax issue confidentially in a reduced-rate initial consultation, call the Tax Law Office of David W. Klasing at (800) 681-1295, or call our San Diego tax office directly at (619) 780-2538. You can also contact us online to schedule an appointment. Please note that all meetings at our San Diego location must be scheduled in advance.
Note: If you have concerns about the privacy of our initial or subsequent communication and are unable to easily travel to our Irvine / Orange County Main Office, consider scheduling a GoToMeeting to safely and securely establish an initial or maintain an existing attorney client relationship. With end-to-end encryption, strong passwords and top-rated reliability, no one is messing with your meeting. To schedule a reduced rate initial consultation via GoToMeeting follow this link. Call our office and request a GoToMeeting if you are an existing client. We are generally happy to travel to any of our appointment only satellite offices for a subsequent meeting in appropriate circumstances once a relationship is established via a signed engagement letter and the payment of an initial retainer or where enough retainer is available where a current client to cover the reasonable travel time and time required for the meeting.
Will it cost me more to hire the Tax Law Offices of David W. Klasing, who’s main office and the vast majority of the firm’s staff is located in Irvine California, but an appointment only Satellite office is close to my location, as opposed to a local company? Absolutely not! See our policies that address this issue here:
