As a U.S. citizen, the Internal Revenue Service (IRS) requires you to pay taxes on your earned income. In fact, there are stiff penalties for people who willfully take actions to avoid paying their taxes.
When it comes to tax evasion, the IRS is mandated to hold people who violate the tax laws accountable. Since 2001, the U.S. government has lost an estimated $3.4 trillion dollars due to tax evasion.
This number indicates the impact that tax evasion has on the federal government’s resources. That’s the primary reason the IRS doesn’t take this action lightly.
What is tax evasion?
There are plenty of laws that can help you save money on the amount of taxes that you owe. However, evading taxes is not one of them.
According to the U.S. Tax Code, tax evasion is described as a willful attempt to defraud the United States government by avoiding the payment of taxes. Penalties for tax evasion include up to a $500,000 fine and no more than 5 years in prison.
There are several ways that people (and corporations) commit tax evasion. Here is a list of common offenses.
1. Depositing money into foreign tax shelters. The IRS has strict laws when it comes to depositing money into foreign accounts. Although some foreign tax havens offer legal ways to reduce tax burdens, many of them are used to illegally evade paying taxes. It’s essential that you know the difference.
2. Failure to report income. Regardless of the source, tax payers are required to report all types of income – legaland illegal. If you fail to report your income, you could be investigated and charged with tax evasion.
3. Failure to submit a tax return if you’ve earned income. Not only can the IRS assess a penalty for failing to file a tax return, you can be investigated for tax evasion if you’ve earned income and failed to submit a tax return.
Steps to take if you’re facing tax evasion
The first thing you should know is it’s never a good idea to ignore a letter from the IRS. This is especially true if the source of the letter is the IRS criminal division.
After you’ve come to terms with the fact that the IRS is investigating you for tax evasion, it’s time to take strategic action. Find a Bucks County tax evasion lawyer and schedule a consultation.
Tax evasion isn’t an issue that you should handle on your own. It’s a serious matter that requires an experienced Bucks County Tax evasion lawyer.
When you receive a letter from the IRS, it’s quite normal for you to be unnerved by the letter. However, you shouldn’t allow the fear to convince you that there is nothing you can do to defend yourself against the allegations. Here are the possible defenses an experienced tax evasion lawyer can use to defend you.
1. The time limit to file tax evasion charges has expired. The good news is the government has a limited amount of time in which they can pursue tax evasion charges against you. This is called the statute of limitation. After this time has elapsed, the IRS can no longer pursue a criminal tax evasion case.
2. Lack of evidence. The IRS has to prove that you had a willful intent to defraud the United States government when you filed your returns. In most instances, willful intent can be difficult to prove without sufficient evidence.
3. You made a mistake. Whether mistakes were caused by ignorance of the tax laws or a clerical error, they can happen.
Our Bucks County tax evasion lawyers are here to assist you. If you’re facing tax evasion allegations, we are available to consult with you about your legal situation.