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Defending Federal Tax Evasion Charges: What You Need to Know

Defending Federal Tax Evasion Charges: What You Need to Know

Getting charged with tax evasion by the IRS can be an incredibly stressful and frightening experience. As a felony offense, a tax evasion conviction can result in years behind bars, massive fines, and a criminal record that impacts your life for decades to come.

However, there are options for fighting back against these charges and avoiding harsh penalties. In this article, we’ll break down everything you need to know about defending yourself against allegations of federal tax evasion.

What Constitutes Tax Evasion?

Tax evasion refers to the willful attempt to avoid paying taxes that you rightfully owe. This is different from tax avoidance (utilizing legal loopholes and deductions to minimize tax liability), as well as honest mistakes resulting in underpayment.

Some examples of tax evasion include:

  • Deliberately underreporting income
  • Overstating deductions and exemptions
  • Hiding money and assets from the IRS
  • Using complex schemes and false entities to obscure taxable funds

Many types of tax evasion are felonies under federal law. The IRS and federal prosecutors take these crimes very seriously, pursuing harsh penalties against those accused.

Gathering Evidence of Your Innocence

The government bears the burden of proving beyond a reasonable doubt that you deliberately and knowingly evaded paying taxes.

As the accused, the most critical thing you can do is work with your legal team to gather exculpatory evidence showing your innocence. This may include:

  • Proof of good faith errors: Demonstrating that underpaid taxes resulted from honest mistakes or misunderstandings, not willful deception. This can include records of communications with tax preparers or accountants.
  • Lack of intent: Gathering evidence showing you never intended to hide income or deceive tax authorities.
  • Third party liability: Placing blame on an accountant, tax preparer, or financial advisor that misled you or provided inaccurate information.

Compiling this evidence and formulating a defense strategy with your attorney gives you the best chance at avoiding harsh penalties.

Common Defenses in Tax Evasion Cases

If formally charged with tax evasion, there are several legal defenses your attorney may employ to fight the allegations:

Reliance on a Tax Professional

One of the most common tax evasion defenses involves placing primary blame on an accountant, tax attorney, or other third party who prepared your returns.

However, for this defense to work, you must prove complete disclosure to the third party preparing your taxes. Essentially, you need evidence showing that you provided all necessary documentation, answered questions honestly, and reasonably relied on the professional’s guidance when filing.

Unintentional Errors

While the IRS must prove you knowingly and deliberately evaded taxes, mistakes do happen. Demonstrating that misreported information or unpaid taxes stemmed from unintentional errors can help avoid felony charges.

With this defense, the key factors are proving reasonableness and good faith. As long as you can show there was no intention to deceive and you took reasonable efforts to file properly, arguing that underpayments were accidental can be an effective defense.

Disagreement Over Interpretation

In some cases, you may have a legitimate disagreement with IRS auditors over how tax laws and regulations apply.

If charged with evasion, you can argue that your tax return interpretation differed from the IRS’s but reflected a reasonable reading of the tax code. Your attorney can fight the charges by demonstrating good faith differences in legal interpretation.

Unconstitutionally Selective Prosecution

Allegations of selective prosecution claim that you’ve been unfairly singled out for punishment under conditions where the IRS has not typically pursued criminal charges.

Proving unconstitutional selectivity is very difficult but can be attempted by showing the IRS is prosecuting you based on improper considerations like race, religion, or the exercise of constitutional rights.

The Best Defense is a Good Offense

Rather than waiting until formal charges have been filed, the best defense is leveraging an experienced tax attorney to engage with IRS auditors and investigators proactively.

In many cases, it’s possible to avoid criminal prosecution altogether by presenting evidence of innocence early in IRS inquiries. An attorney well-versed in the complexities of tax law can often resolve these issues before they ever reach the point of criminal allegations.

The Importance of an Experienced Tax Crime Attorney

Defending against criminal tax evasion charges requires highly specialized legal skills. The intricacies of tax law combined with the complex burden-of-proof requirements in criminal prosecutions make these cases incredibly complicated.

Working with a legal team that includes attorneys with extensive experience in tax law and defending white collar crime allegations is critical. Their expertise can often mean the difference between a slap on the wrist and years behind bars.

When your freedom, finances, and reputation are on the line, it pays to have the best defense team money can buy.

What to Expect If Convicted of Tax Evasion

If convicted of federal tax evasion, you face potentially devastating consequences, including:

  • Prison time: Tax evasion over $10k in a single tax year is punishable by up to 5 years in federal prison. Further offenses can increase sentences up to 20 years.
  • Massive fines: On top of imprisonment, courts can levy fines up to $100,000 for individuals ($500,000 for corporations).
  • Restitution payments: You will likely need to pay back taxes owed with interest and penalties.
  • Asset forfeiture: Authorities can seize property and assets obtained through illegal tax evasion.
  • Civil lawsuits: Following criminal conviction, you may face additional civil lawsuits seeking monetary damages.
  • Loss of rights: In some states, tax evasion convictions result in losing the right to vote, possess firearms, hold public office and other civil liberties.
  • Immigration consequences: Non-citizens convicted of tax crimes can face removal proceedings, rejection of their citizenship applications, and other immigration penalties.

Take Action Now to Protect Your Rights

Dealing with IRS inquiries and tax crime allegations is challenging enough without legal counsel. Attempting to formulate a defense strategy on your own is extremely unwise.

The skilled tax and trial attorneys at [My Firm] have decades of experience successfully defending business owners, investors, and other clients against tax evasion charges. We understand how to gather exculpatory evidence, formulate winning defense strategies, and negotiate with IRS agents and federal prosecutors.

Don’t leave your fate to chance. Contact our team today for a free case evaluation and learn more about how we can protect your rights, reputation, and future. We’re committed to the strongest possible defense against these devastating allegations.

Schedule Your Consultation Now