Knowingly under-reporting income or providing false information to the Internal Revenue Service with the intent to avoid or reduce your tax obligation is a violation of federal law. In most cases, the government will impose civil penalties on violators. But criminal prosecution is a very real possibility that can result in a substantial prison sentence in addition to fines and other penalties.
Defending tax fraud and tax evasion charges requires the expertise of experienced federal criminal defense lawyers who possess a deep understanding of the U.S. tax code and the IRS’s procedures, strategies, and tactics. Stechschulte Nell, Attorneys at Law, in Tampa represents Floridians who are charged with tax-related and other financial crimes in federal court. If you are facing any federal tax or financial investigation, contact the experienced tax defense attorneys in Tampa and St. Petersburg, Ben Stechschulte and Amy Nell.
Tax Crimes and Offenses and Their Penalties
There are several methods by which a person can violate federal taxation laws. While some offenses result in civil fines and penalties rather than criminal prosecution, the size of the fines imposed is often financially ruinous.
What Is Tax Evasion?
Knowingly and willfully under-reporting your income on your tax return with the intent to evade justly owed taxes to the government. This is not the same thing as “failing to file a tax return.” The crime requires the person to know or reasonably believe they owe more tax than is reflected on their return and they file the return attempting to escape paying what they owe.
The offense requires what the law refers to as “mens rea,” which means a “guilty mind.” It means that the government prosecutors need to prove beyond a reasonable doubt that the defendant was aware that they were not reporting truthful information on their tax return. (The crime of attempting to evade taxes carries the same penalty.)
Examples could include paying personal expenses through a business, falsifying corporate documents to hide the nature of funds received, falsifying deductions, misclassifying payments, creating phony debts, and an almost endless list of other schemes to defraud the government’s tax assessment and collection.
Penalty for Tax Evasion
Up to 5 years in federal prison (per count) plus a fine of $250,000 for individuals and $500,000 for corporations, plus repayment to the government for the full cost of prosecution.
What is a False Statement on Your Income Tax Return?
Knowingly and willfully signing and submitting a tax return, under the penalty of perjury, that you did not believe to be true and correct as to every “material” matter. A false statement on a tax return is material if it has “a natural tendency to influence, or [is] capable of influencing, the decision of the [IRS].”
This criminal offense also requires the government prosecutors to prove “mens rea” beyond a reasonable doubt, that you knew the material information you were providing was not correct. Doing so under the mistaken belief that the information was accurate, or not noticing that you included incorrect information will not support a conviction.
Penalty for False Statements on Income Tax Return
Up to 3 years in federal prison (per count) plus a fine of up to $100,000 for individuals and $500,000 for corporations, plus repayment to the government for the full cost of prosecution.
What Is Conspiracy to Commit Tax Evasion, Filing a False Statement, or Other Federal Crime
Conspiracy is among the crimes most successfully prosecuted by the federal government. A person is guilty of conspiracy if they agree with one or others to commit a crime, and one an over act in furtherance of the conspiracy is made by one of the conspirators. As with other offenses, you must be aware of the unlawful nature of the plan or its objective, but you need not be aware of all the details or even know of all the other coconspirators.
Sometimes referred to as a Klein Conspiracy, the government may obtain a conviction even if it cannot prove beyond a reasonable doubt that a particular tax was due and that the plan was to evade that tax. Instead, the offense is
“to defraud the United States by impeding, impairing, obstructing and defeating the lawful functions of the Department of the Treasury in the collection of the revenue; to wit, income taxes.”v
In the context of the crimes we are focused on in this blog post, a person could be guilty of conspiracy to commit one of these tax offenses by knowingly signing a joint return that you knew was drafted by someone else containing false material information. Other possible acts of conspiracy include producing false documents to correspond to the false information on the return, alteration of books to make receipts of gratuitous income look like repayment of a loan, and assisting the tax evader in concealing undeclared income, etc. It’s important to recognize that a person charged with a conspiracy count will also be indicted for committing the underlying federal crime as well.
Learn More > Defending Against Fraud Charges in Florida
Defending Tax Evasion and Tax Fraud
The government prosecutors must prove every element of the charged offense beyond a reasonable doubt. Experienced federal white-collar criminal defense lawyers are experts at raising reasonable doubts by closely examining every item of evidence and illustrating how lacking the government’s evidence is.
- prosecution did not prove the actual tax owed was different or higher than the tax paid
- prosecution did not prove the defendant knew or intended to misstate or underpay the tax
- no overt act was made in furtherance of an alleged conspiracy
- defendant was honestly mistaken or was merely careless
- illegal government conduct should bar the admissibility of evidence
- documentary evidence inconclusive as facts
- credibility of a government witness is weak
- government witness or other evidence is unreliable
Experienced Tax Fraud and Tax Evasion Criminal Defense
If you believe you are being investigated by federal law enforcement for a tax-related crime, or you are currently charged or indicted for these or other white-collar offenses, you want your defense lawyer to have more than just competence; you want an experienced, creative, and authoritative advocate representing your interests before the courts and before all administrative agencies.
If you live in Florida, Tampa’s Stechschulte Nell, Attorneys at Law is ready to preserve your rights and use years of federal court experience to protect you from an avoidable conviction and other penalties. Call us today for a case review; 813-280-1244.
