Tax evasion is an illegal practice where a person, organization or corporation intentionally avoids paying his/her/its true tax liability. Those caught evading taxes are generally subject to criminal charges and substantial penalties. The federal crime of tax evasion is set forth in 26 U.S.C. § 7201 and the Tennessee crime of tax evasion is found at Tennessee Code Annotated § 67-1-1440(g).
The elements of a violation of 26 U.S.C. § 7201 are: (1) existence of a tax deficiency; (2) an affirmative act constituting an evasion or an attempted evasion of the tax; and (3) willfulness. United States v. Nolen, 472 F.3d 362, 377 (5th Cir. 2006). The three elements of the federal crime of tax evasion can be defined as:
- : The actual existence of a due and outstanding liability must exist in order for the IRS to prove that a taxpayer attempted to avoid the assessment and/or payment of his/her tax.
- Affirmative Act: The actual completion of a voluntary and intentional act in order to avoid one’s known legal income tax responsibility including the assessment and/or the payment of a tax.
- Intent / Willfulness: Any effort or attempt to avoid the assessment and/or the payment of a tax. Avoiding the assessment of a tax may include filing a tax return with the intentional neglect to report one’s true income or deductions. Evading the payment of a tax may be as simple as failing to pay one’s liability. However, for tax evasion criminal prosecution, the IRS is generally concerned with taxpayers who willfully attempt to conceal money or assets that may be used to pay one’s tax liability and may include any of the following acts:
- Filing a false tax return
- Creating false records such as invoices and receipts
- Deliberately destroying records
- Making false statements to an IRS agent
- Claiming false deductions
- Concealing bank accounts and/or assets
- Cash structuring
The IRS may assess tax evasion charges against an individual, an organization, or a corporation that may result in additional penalties and the possibility of a felony conviction with fines of up to $250,000 for individuals or $500,000 for corporations and/or up to five years of imprisonment.
If you are currently under investigation or have been charged with federal or Tennessee tax evasion, you need an experienced, knowledgeable tax and criminal defense attorney who can inform you of your rights, guide you through federal civil and criminal tax procedures, and create an effective defense strategy to help protect your financial and personal well-being. For a FREE CONSULTATION contact Norman D. McKellar today at 865-566-0125.