The IRS must prove three elements to find you guilty of felony tax evasion. First, you owed tax. Second, you acted willfully in your actions. Third, you made an affirmative act of evasion or affirmative attempt to evade.
The question being asked here relates to the third element: how serious must the “affirmative” act be? The answer is that it need not be “serious” at all. Tax law does not overlook “minor” acts of evasion. The Ninth Circuit clarified that Congress did not intend “to establish a hierarchy of attempts or evasions and limit [the offense] to those of a more deceitful or troublesome character.” U.S. v. Carlson, 235 F.3d 466, 469, (9th Cir. 2000)(quoting Edwards v. United States, 375 F.2d 862, 866 (9th Cir.1967)). In other words, it is all black and white for the IRS and the government. In a sense, one lie to the IRS is as bad as one thousand—either way you may be found guilty of felony tax evasion under IRC §7201.
