Income Tax Evasion: What Is It?
Income tax evasion, as it relates to white-collar crime, is a criminal offense that occurs when an individual or entity intentionally underreports or fails to report their income to the Internal Revenue Service (IRS) for the purpose of avoiding paying taxes.
This can be accomplished through various methods, including:
- Claiming false deductions. This involves falsely claiming deductions or expenses that are not eligible for tax purposes.
- Concealing income. This involves deliberately hiding income from the IRS, such as by diverting funds into undisclosed bank accounts or using offshore entities.
- Failing to file tax returns. This involves intentionally not filing required tax returns to avoid reporting income.
- Falsifying records. This involves creating false or misleading financial records to understate income or expenses.
Income Tax Evasion Penalties
Income tax evasion is a serious federal crime that can result in significant penalties, including:
- Imprisonment and fines. Tax evasion is classified as a felony offense and carries a penalty of up to five years in prison and/or a fine of up to $250,000 for individuals or $500,000 for corporations.
- Restitution. Defendants can be required to pay back the evaded penalties with interest.
- Civil penalties. The IRS can impose additional penalties of up to 75% of the unpaid tax, severely increasing the financial burden.
- Asset seizure. The government may seize personal and business assets to satisfy tax debts, potentially leading to significant financial loss.
- Wage garnishment. The IRS can legally take a portion of your paycheck to repay tax debts, leaving you with less disposable income.
- Credit score damage. Tax liens and unpaid debts can severely impact your credit score, making it difficult to obtain loans or credit.
- Loan difficulties. A history of tax evasion can make lenders view you as high-risk, complicating or preventing mortgage and loan approvals.
- Loss of professional licenses. Many professional licensing boards may revoke or suspend licenses of individuals convicted of tax crimes.
- Employment challenges. A criminal record for tax evasion can make it difficult to find employment, especially in fields requiring trust and financial responsibility and in cases involving corporate tax evasion.
- Relational strain. The stress and stigma of tax evasion can put significant strain on personal, professional, and family relationships.
Benefit from Our Defense Counsel
With decades of collective experience and a track record of success in high-profile tax evasion cases, Brad Bailey Law is your trusted partner in navigating complex tax disputes. Our team of skilled attorneys has a proven ability to develop effective defense strategies, meticulously analyze evidence, and negotiate favorable settlements with the IRS. We are committed to providing comprehensive representation and personalized attention to each client, ensuring that their rights are protected throughout the legal process.
Our firm has a deep understanding of the intricacies of tax law and has successfully defended clients against a range of tax evasion charges, including those involving offshore accounts, unreported income, and fraudulent deductions. Let us help you defend against these charges.
Schedule a consultation today by calling (617) 500-0252.