Orange Country Income Tax Evasion Defense Lawyer
The IRS and Department of Justice take extremely aggressive measures where income tax evasion is suspected. If you are being charged or investigated for attempting to defeat or evade your income tax payment or assessment, you could be facing a felony criminal record, tens or hundreds of thousands of dollars in fines, and years in prison. With so much at stake, you need professional support and aggressive legal representation on your side. At The Tax Law Offices of David W. Klasing, have an Orange County income tax evasion lawyer that has more than 20 years of experience represent you, and offer you the combined legal and financial acumen of tax attorneys and accountants. To schedule a confidential case evaluation, call our law offices at (800) 681-1295 today.
When Can You Be Charged with Tax Evasion?
In order to understand the grounds for tax evasion charges, you need to understand how the offense is defined. Also referred to as “attempt to evade or defeat tax,” income tax evasion essentially means that a defendant took deliberate actions to try and avoid paying his or her full tax obligations. However, in accordance with Section 7201 of the Internal Revenue Code, there are actually two subcategories of income tax evasion:
- Willful attempts to defeat or evade tax assessment. The IRS reports that in many cases, the taxpayer will either file a false return that contains inaccurate information or will falsely claim deductions that are not actually applicable. This is not the same as an attempt to avoid paying the tax — it’s an attempt to prevent tax obligations from being accurately assessed in the first place.
- Willful attempts to defeat or evade tax payment. In contrast to evading assessment, evading tax payment means that while the taxpayer’s obligations have already been established, he or she avoids actually paying those obligations by concealing their assets or accounts.
While these two subcategories have subtle differences, you may have noticed that both contain the term “willful.” This is very important because, in order to prove that a defendant evaded or attempted to evade tax obligations, there are three critical components that must be established. As the Criminal Tax Manual states, “To establish the offense of attempting to evade and defeat a tax, the government is required to prove
beyond a reasonable doubt the following three elements.” These three elements are:
- The defendant owed a “substantial income tax” in addition to that which was actually declared on his or her income tax return.
- The defendant “made an affirmative attempt” to evade or defeat the assessment or payment of tax.
- The defendant’s actions were “willful,” i.e. deliberate. The IRS states that any “voluntary, intentional violation of a known legal duty” is sufficient to fulfill the willfulness requirement.
Fortunately for defendants, the burden of proof falls upon the prosecution in these sorts of cases. Defendants are not required to call upon witnesses or to provide any evidence of their own.
California Tax Evasion Attorney
While millions of Americans pay their taxes each year without issues, thousands more end up facing a nightmare situation due to their tax returns being flagged for potentially false or misleading information. Sometimes, this may have been a genuine mistake and can be cleared up with the IRS without a criminal referral. However, if your audit is referred to the IRS criminal investigation division, and after investigation, on to a federal prosecutor and they choose to charge you with tax evasion, you could face severe criminal penalties, including years behind bars and financially devastating restitution.
At the Tax Law Offices of David W. Klasing, our California Tax Evasion Defense Attorneys & Kovel Accountants have years of experience helping clients around the state who have mere naked exposure or that have been actually charged with tax evasion bring their cases to a successful resolution. Of course, the best thing you can do to is to speak to an Experienced Tax Attorney. Our attorneys can help bring you back into compliance. Call our firm today at (800) 681-1295 to schedule a consultation.
What is the Crime of Tax Evasion?
Under federal law, tax evasion is also referred to as an “attempt to evade or defeat tax.” It involves deliberate attempts to cheat the system and pay lower taxes by underreporting income, claiming deductions for which you are not eligible, and other acts involving false or misleading information on your returns that would lead to a purposefully understated tax assessment. Generally speaking, there are two subcategories of tax evasion: willful attempts to defeat or evade tax assessment and deliberate efforts to defeat or evade tax payment which occurs where a taxpayer evades collection of taxes that have been legally assessed.
Willful Attempts to Defeat or Evade Tax Assessment
This category refers to actions taken to purposely / willfully avoid or understate taxes being assessed against you in the first place, rather than not paying taxes that already have been assessed. It can include actions like failing to disclose all sources of income on your returns, underreporting your income from a specific source, reporting inaccurate information on your tax returns, or claiming deductions or credits for which they are not eligible. For example, if you are mainly employed by a salon but also do haircuts outside of the salon as a side business, and you fail to report the income from your side business on your tax returns, you could face this type of evading charge.
Willful Attempts to Defeat or Evade Tax Payment
Unlike willful attempts to defeat or evade assessment, this type of evasion case stems from conduct after your taxes have already been assessed. If you try to conceal your assets, sources of income or financial accounts to avoid paying your obligations, for example, that would qualify as this type of criminal tax behavior.
How Can A Tax Lawyer Assist Me with My Tax Evasion Case?
As stated above, the best time to contact a criminal tax defense lawyer for help is before you are facing criminal tax charges. First and foremost, we can help you reconstruct your records and file your tax returns accurately and entirely in the first place. If you have already filed inaccurate returns but the IRS has not yet opened an audit or criminal tax investigation, there are several voluntary disclosure programs with varying eligibility requirements that can keep you from facing the most severe criminal penalties. At the Tax Law Offices of David W. Klasing, our experienced voluntary disclosure attorneys can help you figure out which one of these programs, if any, is best for you.
If you have already been charged with evasion or any other tax crime, a skilled criminal tax defense lawyer can try to work out a deal with the prosecutor for your charges to be downgraded or dismissed in exchange for you paying what you owe, usually plus interests and fines. The burden of proof in this type of case is on the prosecution to prove beyond a reasonable doubt that you willfully made an affirmative attempt to evade or defeat the assessment or payment of taxes. There is no tax crime, including evasion, of which you can be convicted if the prosecution cannot prove that you acted willfully, meaning that your conduct was not just a careless mistake or error.
This high burden of proof can be helpful to our lawyers before trial, not just during a potential trial. We can use it as a bargaining chip, especially if their case is weak. Overall, to get a better deal for you, perhaps one where your criminal charges will be dismissed. If we cannot get a dismissal, we may be able to get a deal where you plea to a lesser charge or where you plead guilty in exchange for a lenient sentence recommendation from the prosecutor, which the judge will almost always follow. Of course, if you do not wish to take a deal, our skilled trial lawyers at the Tax Law Offices of David W. Klasing are ready to fight for a not guilty verdict at trial.
What About California-Specific Tax Agencies?
You can also be audited and referred for criminal prosecution for tax evasion by California state tax agencies. The three major ones are the California Franchise Tax Board, which handles state income taxes, the California Employment Development Department, which handles state payroll taxes, and the California Department of Tax and Fee Administration, which handles state sales taxes. Many audits and criminal tax charges from the agencies come from referrals they received from the IRS as a sort of piggy-back investigation. Sometimes, however, they can independently conduct their tax evasion investigations for California-specific crimes. I have also seen multi tax agency task forces set up to after common issues like Zapper software.
Each of these agencies has similar definitions of tax evasion to that of the IRS. However, there are some critical differences in the way these cases should be handled and the processes that the agencies employ. If you are concerned about tax evasion related to actions on your state sales, income and employment taxes, reach out to an experienced California tax lawyer like those at the Tax Law Offices of David. W. Klasing, and we can walk you through your potential options.
What Are the Penalties for Evading Tax Payment or Assessment?
It’s important to understand that income tax evasion charges are extremely serious, and should absolutely never be ignored. If you are facing these charges, or if you have concerns about the results of an IRS tax audit or IRS criminal investigation, it is imperative that you consult with an experienced tax attorney right away. Evading or attempting to evade tax obligations is a felony. Pursuant to 26 U.S. Code § 7201:
Any person who willfully attempts in any manner to evade or defeat any tax imposed by this title or the payment thereof shall, in addition to other penalties provided by law, be guilty of a felony and, upon conviction thereof, shall be fined not more than $100,000 ($500,000 in the case of a corporation), or imprisoned not more than 5 years, or both, together with the costs of prosecution.
Keep in mind that the above penalties pertain only to criminal charges, and even the civil consequences can be very harsh. Civil consequences can include a massive 75% penalty on any assessed income tax, plus interest on the penalty. Furthermore, while the criminal penalties are restricted to the five-year statute of limitations, civil penalties are not bound to any time limit.
If You Are Facing Tax Evasion Charges, Call Our Skilled California Tax Attorneys Today
Whether you are facing tax evasion charges at the federal, state or local level, our experienced tax attorneys at the Tax Law Offices of David W. Klasing can help you mitigate the damage and bring your case to the most positive possible resolution. We will leave no stone unturned, serving as your fearless advocate and fighting to get the charges against you downgraded or dismissed. To schedule a consultation, call us at (800) 681-1295 today.
Orange County Tax Law Offices
For any of your tax planning compliance and controversy needs in Orange County, 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 (949) 681-3502 or 800-681-1295 or contact us online today to schedule a reduce rate initial consultation at our Orange County tax law offices, or at one of our other convenient locations across Southern California.