What are White Collar Crimes - Tax Evasion?
"Uh Oh, They’re Charging Me With Tax Evasion!"
Raise your hand if you like paying taxes. Nobody! Nobody likes paying taxes, but the law requires it. If you don’t pay your taxes, the Government will come after you, and you may find yourself facing charges for Tax Evasion. Both the State and the Feds have statutes prohibiting tax evasion. In Minnesota, you can get in trouble for knowingly—rather than accidentally, inadvertently, or negligently—failing to file a return, and even more trouble for willfully and intentionally attempting to evade or defeat a tax by failing to file it when required. The State also has criminal penalties for:
filing false or fraudulent returns
engaging in retail sales without a permit
advertising that a tax is not due when it actually is
knowingly giving an employer false or fraudulent information for tax withholdings.
But those are minor compared with Federal Tax Evasion. The Federal Government does not mess around, and if they think you’re not paying your taxes when you should be, then you could be indicted. The federal statute makes it a felony for any person to willfully attempt to evade or defeat the assessment of a tax, as well as willfully attempting to evade or defeat the payment of a tax.
In order to convict someone of tax evasion under the federal statute 26 U.S.C. 7201, the Government has to prove:
The defendant owed substantial income tax in addition to that which what they reported on their return;
The defendant attempted to evade and defeat that additional tax; or
The defendant failed to pay the tax that was owed; and
The defendant acted willfully.
What does mean to evade taxes?
The Eighth Circuit defines an “attempt to evade or defeat” a tax means to escape paying a tax by means other than lawful avoidance, which could include various schemes, subterfuges, and devices. The word “attempt” in this context means that:
A) the defendant knew and understood that during the calendar year charged, they had some income which was taxable, and which they were required by law to report, and
B) by willfully failing to report all their known income which they knew was required by law to state in their return for that year, or in some other way or manner.
An attempt to evade an income tax for one year is a separate offense from the attempt to evade the tax for a different year. Penalties for tax evasion in Federal Court get worse the more money was owed in taxes, and could involve restitution on top of incarceration. Tax Evasion is no joke. Here’s an example:
A jury convicted a man named Thomas after the Government presented evidence that he attempted to evade the payment of more than $450,000 federal income taxes by making extensive use of cash, obtaining assets using a third party’s credit card, and making false statements to the Internal Revenue Service (IRS) agents attempting to collect his taxes. He did not win his appeal. That was the case of United States v. Schoppert, 362 F.3d 451 (8th Cir. 2004) and shows that despite creative efforts, the defendant was still busted by the Government and owed considerable restitution.
If you have been targeted by the State or Federal Government for tax evasion charges, it can get complicated quickly, but there may be great defenses.
Catherine is an experienced criminal defense lawyer that defends against charges of Tax Evasion or Avoidance. If you or a loved one have been accused of Tax Evasion, she can help. Call today for a free consultation.