Felony tax evasion is perhaps the most infamous crime in the Internal Revenue Code. To convict a defendant of felony tax evasion, the prosecutor must prove a tax deficiency (failure to pay taxes) and an intentional effort to avoid taxes. While a conviction can result in serious criminal penalties, if handled by a competent federal criminal defense attorney who knows how to spearhead a case in the right way, the penalties could be instead mitigated to civil fees and penalties. The key is early intervention and making the correct decisions in resolving a tax evasion charge.
A tax deficiency occurs when someone hasn’t paid as much in taxes as is owed. Some courts require a “substantial” deficiency for a tax evasion conviction, but most hold that any shortcoming will suffice. Did you know that the extent of the deficiency is measured by the tax amount that hasn’t been paid, not by the amount of unreported income? Most people don’t realize this. As with any other crime, the prosecution may prove their case through direct evidence. However, finding clear proof of unreported income can be difficult because investigators often don’t have access to taxpayers’ private records.
Without direct proof, prosecutors must rely on circumstantial evidence. Among the sources the government uses to search for circumstantial evidence of unreported income are:
- net worth
- bank deposits
- cash payments
Are you or your business under investigation by the IRS for charges of tax evasion? The longer you wait the more you could be hurting your case. Contact us immediately and schedule a free initial consultation with a seasoned Newark tax evasion attorney.
