One of the things the government must show to prove tax evasion is that the defendant knew of his or her duty, and voluntarily and intentionally violated that duty. In other words, the government must show that the taxpayer acted willfully in structuring his or her affairs.

A successful defense, therefore, may be put forth if it can be shown that the defendant had a good faith belief that the taxpayer was not violating federal tax law in taking the disputed action. For example, if a defendant honestly but mistakenly believed that a distribution from a corporation was a return of capital and therefore not income—and the jury believes him or her—then the IRS can be prevented from proving tax evasion because the willfulness element of evasion would not be satisfied. Cheek v. U.S. 498 U.S. 192, 202 (1991). However, the jury would be “free to consider any admissible evidence from any source showing that [the taxpayer] was aware of his duty to file a return and to treat the distributions as income.” Cheek v. U.S. 498 U.S. 192, 202 (1991). What this means is that one cannot simply claim ignorance when charged with tax evasion because the jury can consider all sorts of evidence to show a person really did know the duty imposed under federal or state tax laws.