FELONY TAX EVASION
The United States Government enforces the tax laws through comprehensive CRIMINAL TAX statutes. The Government is regularly increasing the number of tax prosecutions nationally, as well as in the State of Mississippi. Generally speaking, the crime of TAX EVASION involves the intentional failure to report income and/or the improper claiming of tax deductions. Typical TAX EVASION charges in MISSISSIPPI are the result of:
- the failure to report cash income;
- deducting personal expenses on a business tax return;
- concealing income;
- falsely claiming charitable deductions;
- inflating charitable deductions;
- submitting false information on your tax return;
- failing to report foreign income;
- failing to file a return
- keeping a double set of books.
WILLFUL TAX EVASION
The key to the successful defense of any TAX EVASION case is proving that the accused taxpayer did not intentionally make a material misrepresentation or attempt to deceive the IRS for the purpose of avoiding or reducing the amount of taxes paid. For a person to be found guilty of both felony and misdemeanor tax charges, the Government must present proof of “willful” conduct. The United States Supreme Court has defined the term “willful” as being an “intentional violation of a known legal duty.” The Fifth Circuit Court of Appeals has defined “willfulness” to include any person who willfully attempts in any manner to evade or defeat any tax. A high standard is more than justified given the complexity of the federal tax laws.
CRIMINAL TAX EVASION PENALTIES
Under 26 U.S.C. Section 7203, the failure of an individual taxpayer to file a tax return is a misdemeanor which is punishable by a fine of up to $25,000.00 (and up to $100,000.00 for corporations). While a potential misdemeanor charge is scary enough, the IRS can easily turn it into a felony charge. All that the IRS needs to convert your charge to a felony is a good faith reason to believe that you were aware of the duty to file, and voluntarily and intentionally failed to file. The consequences of a felony tax charge are a fine of up to $100,000.00 for an individual (and up to $500,000.00 for a corporation). However, government prosecutors have significant discretion in indicting a person for felony tax evasion and often do so by simply alleging that there was conduct that was likely to mislead the IRS. Because the potential for large fines and jail time, it is always important to immediately retain an experienced Mississippi criminal defense attorney as soon as possible.
Most people are at least familiar with what an IRS audit involves. During an AUDIT of your taxes, if your IRS agent suspects you have engaged in fraud, additional penalties may result, or even worse the cased can be referred to the IRS Criminal Investigation Division (CID). The CID is a part of the enforcement mechanism for the IRS. Once the CID becomes involved, investigators may contact your friends, employer, co-workers, bankers and spouse, all in an effort to gather evidence against you. CID investigators are usually accountants who also have training in law enforcement techniques.
If the decision to prosecute has been made, the chances of a conviction are approximately 80%. Close to half of those convicted will actual be incarcerated. So it is imperative that you immediately retain an experienced Mississippi Criminal Defense Attorney as soon as you learn that you are the subject of a CID investigation. If you hire a lawyer before you are actually indicted for tax evasion, there may be an opportunity to confer with the government to try and avoid having the charges presented to a Grand Jury.
While it can be difficult to avoid prosecution if the IRS believes that it has a strong case against you, we will help you show that your situation involves a misunderstanding of tax law rather than any willful violation. At Danks, Miller & Cory, our lawyers and tax experts will work with you to avoid prosecution if possible. We will also work with you to determine the most cost effective way to effectively defend you against any charges that are being brought against you.
CRIMINAL CHARGES AGAINST ACCOUNTANTS
Accountants themselves can be charged with a felony for aiding and assisting the taxpayer to obstruct or impede the due administration of tax enforcement. If you are an accountant in Mississippi and learn that you are the subject of a potential IRS criminal investigation, call us to set up an initial consultation.
STATUTE OF LIMITATIONS
There is a six-year STATUTE OF LIMITATIONS for filing criminal charges based on failing to file a tax return, but there is no STATUTE of limitations on how long the IRS can seek taxpayers and demand payment or taxes owed on non-filed returns. It is almost always better to voluntarily file a return than simply ignore your legal duty.
FAILURE TO FILE A TAX RETURN
It costs most people more money in interest and penalties to owe the IRS than it does to borrow money from almost any other source. Therefore, even if you have not filed returns for many years it is usually prudent to resume filing. If you have failed to file your tax returns, under-reported your income, or knowingly claimed excess deductions, by doing nothing you may find yourself facing a criminal tax investigation. An IRS criminal investigation is a very serious matter, and criminal tax evasion and tax fraud have the potential to result in a criminal indictment and incarceration. It is always our recommendation that you do not discuss your tax situation with IRS criminal investigators without legal advice and representation. Effective legal counsel can make the difference between freedom and time spent in a federal penitentiary.
PROTECTING TAXPAYERS THROUGHOUT THE STATE OF MISSSISSIPPI
As with any federal criminal investigation or prosecution, when you are facing federal tax evasion charges, the deck is often stacked against you. The Federal Government has virtually unlimited resources to prosecute the claims. They can charge multiple counts to drive up the potential risk to the taxpayer. All of this makes your choice of lawyer one of the most important decisions you will ever have to make. For experienced defense counsel, contact us online. We welcome the opportunity to discuss your situation during a free consultation.