Profiles of 3 federal tax crimes

On Behalf of | Jul 26, 2024 | White Collar Crimes

Filing a tax return is one of the duties that companies and income earners have in the United States. Failing to file a return can lead to criminal charges. Understanding the various types of tax crimes may help those who are obligated to file taxes to avoid such missteps, and could be beneficial for those who are facing criminal charges for any of these alleged forms of wrongdoing.

There are many federal tax crimes. A conviction for any of the following can lead to time in prison, fines, a criminal record and other serious penalties, including collateral consequences if the case results in a felony conviction.

Tax evasion

Tax evasion occurs when someone intentionally avoids paying the taxes they owe. This can involve hiding money in offshore accounts, not reporting all their income or claiming more deductions than they should. This is often a complex crime because it can entail schemes that involve offshore accounts and shell companies. It’s sometimes unearthed by investigations and audits.

Filing false tax returns

Filing false tax returns is another serious issue. It’s similar to tax evasion because the filer intentionally reports false information on their tax returns. This can include incorrect income, deductions, credits or expenses. These discrepancies are intentionally made to mislead the Internal Revenue Service. It’s often done to reduce tax burden, but it’s still illegal even if no reduction in tax burden is successfully achieved.

Willful failure to file or pay

Willful failure to file means that a person “simply” doesn’t file their income tax return despite being required to file. This can apply to those who should receive a refund, as well as those who are supposed to pay in. Willful failure to pay means that someone doesn’t pay what’s owed to the IRS.

One thing to know about all of these crimes is that the prosecution must prove intent. Someone making honest mistakes or who has suffered innocent misunderstandings typically won’t face criminal charges. With that said, anyone who’s facing these charges should get to work on a defense strategy quickly. These cases can be rather complex, so taking the time to determine how to address prosecutor’s claims is important.

FindLaw Network
Gary Jay Kaufman
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