Tax Offenses

Tax Fraud & Crimes

Tax crimes include filing false tax returns or documents, tax evasion, failure to collect employment or pay, and failing to file a tax return. The penalties for criminal tax fraud range up to 5 years in jail, plus fines of up to $500,000, plus the costs of prosecution for each separate tax crime. Once the criminal tax case is completed the IRS Criminal Investigation unit will refer the case back to the IRS Examination Division where the taxes will be assessed, and the IRS can be expected to add on the civil tax fraud penalty, on top of any criminal tax fraud fines.

Attempt to Evade or Defeat Tax

Under 26 U.S.C. § 7201 it is a federal crime for a person to evade a tax obligation. The elements for evasion include:
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An affirmative act constituting an attempt to evade or defeat a tax or the payment thereof.
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An additional tax due and owing.

Tax Evasion

Tax evasion is a crime that is charged when a person purposefully fails to pay or seeks to avoid paying the taxes due to the government.

Prohibited Activities

In order to be found guilty or being convicted of tax evasion, the government must prove beyond a reasonable doubt:
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The existence of a tax deficiency;
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The intent to evade payment of the tax;
An affirmative act constituting an evasion or attempted evasion of the tax. This may be any act that serves to mislead the government or conceal funds.


Under California Revenue and Tax Code § 19705, tax evasion is punishable by a fine of up to $ 100,000.00 and/or a prison sentence of up to five years.

Under the Texas Tax Code Chapter 151, sales tax evasion may be punished as a first-degree felony, punishable by a fine of up to $ 10,000.00 and up to 99 years in prison. The State of Texas may also suspend or revoke sales tax permits for those convicted.

Under federal law, 26 U.S.C. § 7201 makes tax evasion a federal crime to any person who willfully attempts in any manner to evade or defeat any tax imposed. In addition to other penalties provided by law, federal tax evasion is a federal felony and, upon conviction thereof, shall be fined not more than $ 100,000.00 ($ 500,000.00 in the case of a corporation), or imprisoned not more than 5 years, or both, together with the costs of prosecution.
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