Federal Tax Evasion Attorneys

If you face allegations of tax evasion by the IRS or the Department of Justice, Norman Spencer Law Group is your answer! Our federal tax defense attorneys will protect you no matter where you are.

Tax investigations are sometimes resolved administratively, but sometimes the IRS will recommend that the DOJ prosecute the taxpayer for tax evasion. Our team of defense attorneys and forensic accountants will always protect your rights!

What is Tax Evasion Under Federal Law?

Tax evasion is covered by sections 7201 and 7202 of the Internal Revenue Code. The law provides that any person who willfully attempts to evade any tax imposed by the Internal Revenue Code commits a felony. The penalties for this violation include imprisonment and fines.

What is the Statute Of Limitations for Tax Evasion?

The statute of limitations in section 7201 cases is six years starting from the date of the commission of the offense, which is the legal due date of the tax return or even later when the last affirmative act of evasion happens. So, for all practical purposes, the statute of limitations could be more than six years after the return due date.

When Can The Statute Of Limitations Be Tolled?

Sometimes the statute of limitations in Section 7201 cases will be tolled. Here are the examples of when it would happen:

  • The defendant is outside of the United States.
  • There is pending litigation to quash a third-party recordkeeper summons or when a third-party record-keeper does not comply with a summons within six months.

What Should the Government Prove in a Tax Evasion Case?

Each criminal case has the basic elements prosecutors must prove to convict the defendant. In federal tax evasion cases, they have to prove three elements beyond a reasonable doubt: (1) you owe government tax; (2) you committed some affirmative act of tax evasion; and (3) you did it willfully.

The government doe not have to show how much money you owe in back taxes, only that you owe it.

Is There a Minimum Amount of Tax Due and Owing?

Federal courts take different positions on how substantial the back tax should be for the purposes of tax evasion prosecution. In some federal circuits, courts have ruled that the amount should be substantial enough while others hold that any tax deficiency is enough. Some courts will look at the totality of circumstances, without defining the minimum amount.

That said, the vast majority of tax evasion cases originates with the IRS recommendation to the DOJ to prosecute the taxpayer. The IRS policy is to only refer to cases where the additional tax due exceeds certain minimum amounts. That could be $2,500 of average yearly additional tax due in simpler cases. In more complex matters the minimum could be at least $10,000 of additional tax due for the period in question and at least $3,000 of additional tax due for any single year within that prosecution period.

However, that does not mean that if the additional tax due is below these minimum standards, the government will never prosecute. In fact, they may still file criminal charges if they believe that the conduct was so egregious that the taxpayer deserves to be prosecuted for it.

What Constitutes Tax Evasion?

As we just discussed, the government must prove that the defendant committed an affirmative act of tax evasion. But what is it? Does it have to be criminal in nature? The answer is no. The act itself may be perfectly legal, but it becomes criminal if it is done with the intent to evade income tax. There is also a distinction between when the act of tax evasion is a felony and a misdemeanor.

According to the Supreme Court, the misdemeanors involve only a willful omission and the felony requires a willful and positive attempt. So, the act must be specifically committed to mislead the IRS or conceal information from it.

Federal courts, from the Supreme Courts down to local circuits gave these examples of what could constitute affirmative action for purposes of section 7201:

  • Keeping a double set of books
  • Making false entries or alterations
  • Creating false invoices or documents
  • Destroying books or records
  • Concealing assets or covering up sources of income
  • Handling one’s affairs to avoid producing the type of records that are usual in transactions of the kind
  • Making false statements to agents of the IRS or the Treasury
  • Filing a false form or return
  • Consistent patterns of underreporting large amounts of income
  • Overstating deductions
  • Keeping a safe deposit box or bank account in an assumed or misleading name
  • Using cash and credit cards in another’s name
  • Engaging in sham transactions
  • Failure to inform an accountant or other tax return preparer of specific income items

What Constitutes Willfulness?

Besides proving that you acted affirmatively to evade taxes, the government is also required to show beyond reasonable doubt that you acted willfully.

This means that the act was more than a mistake and more than negligence on your part. You may be filing a tax return underreporting income, but if you make a mistake, being careless or even negligent, or rely on professional advice, your actions are not criminal.

What Norman Spencer Law Group Can Do For You

At Norman Spencer Law Group Our Tax Defense Attorneys will hold the government to its obligations. We defend taxpayers all over the country in all IRS and other federal administrative and criminal tax matters.

Our team has not only seasoned federal defense attorneys but also forensic accountants and former IRS criminal investigations agents and certified fraud examiners.

When we accept a new case, we use our extensive experience to help you avoid and mitigate the worst scenarios. Many of our clients were able to settle their tax cases with the government without being criminally charged in the first place. We saved our clients millions of dollars in back taxes by convincing the IRS and federal prosecutors that our client’s tax liability is significantly less than the government believed.

Serving Nationwide

Our clients are coming from all over the country and even from abroad. We represent individuals and businesses in all industries and walks of life. If you are approached by the IRS Special Agents, do not discuss anything with them and do not share any documents with them before you speak with our lawyers. Call Norman Spencer Law Group to speak with one of our federal tax lawyers about your situation!