Criminal Tax Evasion

While the civil repercussions for tax evasion are quite severe, and can include substantial fines and penalties, the most serious cases of tax evasion or fraud result in criminal penalties, as well.  In addition to any civil penalties that may be assessed for the underpayment of tax obligations, which can be up to 75% of the amount of the underpaid tax obligation, tax evaders may face additional criminal fines, as well as substantial jail time. 

What is Criminal Tax Evasion?

There are a number of criminal offenses that qualify as tax evasion under federal law.  One of the most common tax-related criminal offenses is the felony offense of attempting to evade or defeat tax, which carries a fine of up to $250,000, and imprisonment for up to five (5) years.  This offense would cover situations where a taxpayer has purposely attempted to avoid paying tax obligations by claiming deductions or credits on his or her tax return to which he or she is clearly not entitled, or taken other affirmative actions to avoid paying legitimately owed taxes to the federal government.  A taxpayer also might commit this offense if he or she took payments in cash and failed to deposit them in a bank in order to avoid reporting them for tax purposes, or if he or she transferred assets to another person in order to conceal them from the government and therefore avoid paying taxes for them.

Making False Statements on Tax Returns

Another closely related type of tax evasion crime is making false statements on a tax return.  Under federal law, this criminal offense is also a felony, which carries a fine of up to $250,000, and imprisonment for up to three (3) years.  Therefore, if a taxpayer omits or minimizes his or her income from a tax return, or claims deductions for minor children not in his or her household, then he or she has committed this type of tax evasion.

Additionally, all states have similar criminal and civil laws that apply to tax evasion with respect to state taxes.  Therefore, you may be find yourself facing the same types of civil and criminal penalties under state tax evasion laws that exist under federal tax evasion laws. 

Help for Criminal Tax Evasion

Since the potential for substantial fines and terms of imprisonment is high if you are charged with tax evasion under state or federal law, you should immediately consult with an attorney who is experienced in both tax and criminal law.  An attorney will be able to assist you in dealing with both the civil and criminal penalties that might result from a charge of tax evasion or tax fraud, which can involve minimizing your tax liability and civil penalties, as well as avoiding lengthy terms of imprisonment.