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27 Nov 23

How to Handle Federal Tax Evasion Charges in New York

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Last Updated on: 15th December 2023, 06:26 pm

How to Handle Federal Tax Evasion Charges in New York

Dealing with federal tax evasion charges can be an incredibly stressful and challenging situation. As a New Yorker facing these allegations, it’s important to understand the specific laws and potential penalties you may confront. This guide will walk you through the key things to know when fighting federal tax evasion accusations in New York.

Understanding the Charges

Tax evasion involves intentionally trying to avoid paying taxes that you rightfully owe. There are a few common ways charges can occur:

  • Failing to report income
  • Claiming false deductions
  • Hiding money in offshore bank accounts
  • Using a fake Social Security number
  • Lying about your residence to lower state taxes

Prosecutors tend to pursue tax evasion charges when there appears to be deliberate fraud or concealment. Simply making a mistake on your taxes doesn’t necessarily mean you’ll face criminal allegations.

Assessing the Potential Penalties

If convicted of federal tax evasion, penalties can be severe. This may include:

  • Up to 5 years in prison
  • Fines up to $250,000 for individuals or $500,000 for corporations
  • Paying back taxes plus interest and penalties
  • Loss of certain civil rights

Sentences often depend on the amount of tax evaded and specific nature of the crime. Those caught evading taxes of $10,000 or less may receive probation instead of jail time. But tax fraud involving $100,000 or more results in an average prison sentence around 3 years.

Gathering Evidence and Building Your Defense

Fighting federal tax evasion charges requires quickly analyzing the prosecution’s evidence while also finding information to counter their claims. An experienced tax attorney can help examine issues like:

  • Were proper procedures followed during the audit and investigation? Evidence or statements gained improperly may be excluded.
  • Is there proof you intended to evade taxes or could it have been an honest mistake?
  • Can you demonstrate relying on a tax professional’s advice? This can potentially impact intent and innocence claims.

Thoroughly investigating these questions provides the foundation to start establishing a defense.

Using Defense Strategies to Fight the Allegations

Several legal defenses exist in battling federal tax evasion charges, including:

Reliance on a Tax Professional’s Advice

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Demonstrating you fully disclosed information and relied on an accountant or tax attorney’s guidance can show innocence in some cases. However, you still had responsibility to ensure returns were accurate.

Lack of Willfulness and Intent

Since tax evasion implies intentionally violating tax laws, proving you lacked intent and did not willfully break codes may defeat charges. For instance, being unaware income needed reported or not understanding complex tax issues.

Statute of Limitations Expired

Tax evasion charges must be brought within 6 years. If allegations involve events occurring over 6 years ago, you may escape prosecution.

Improper Audits or Investigations

Revealing auditors or investigators used illegal tactics like excessive force or intimidation could nullify charges.

Unreported Income Was Non-Taxable

Demonstrating funds were non-taxable gifts, loans, or other non-income sources means tax evasion related to that money cannot occur.

IRS Errors

Finding IRS mistakes in calculations leading to underpayment claims can defeat allegations. This may require tax litigation expertise identifying issues.

Considering a Plea Bargain

When evidence strongly supports tax evasion charges, accepting a plea bargain could significantly reduce penalties. Rather than facing 5 years prison and $250,000 fines if convicted, pleading guilty might only carry 1 year jail time and $50,000 fines. Agreements may also allow paying owed taxes while avoiding prison.

Plea deals still bring serious consequences making them an important decision requiring careful thought. Speaking with an experienced attorney helps weigh options.

Leveraging Legal Counsel for the Best Resolution

Facing tax evasion charges brings overwhelming legal complexities. Working with an attorney intimately familiar with tax law in New York brings specialized skills helping guide you through the system. They understand nuances that general practitioners lack, which could make the difference between prison and preserved freedom.

Take steps now to consult tax litigation lawyers before charges escalate further. Their expertise navigating these cases gives you the best chance at a favorable outcome. But time is of the essence, so contact knowledgeable representation immediately.