Federal tax evasion is an intentional attempt to evade assessment or payment of a tax. An honest filing mistake or inability to pay is not, by itself, proof of that offense.
What prosecutors must establish
26 U.S.C. § 7201 makes a willful attempt to evade or defeat tax or its payment a felony. Courts generally require proof of willfulness, a tax deficiency, and an affirmative act of evasion. Conduct such as false records, concealed income, or concealment of assets may be evidence, depending on the facts. A foreign account or transfer to a family member is not automatically evasion; purpose and reporting obligations matter.
Assessment and payment
Evasion of assessment concerns efforts to keep the tax from being correctly determined. Evasion of payment concerns efforts to defeat collection of a tax due. Both require the applicable elements. A taxpayer who discovers an error should obtain advice on correcting the return and preserving records.
Penalties and failure to file
A conviction under section 7201 can carry up to five years of imprisonment plus applicable fines and costs. 26 U.S.C. § 7203 separately makes certain willful failures to file, pay, or provide required information a misdemeanor punishable by up to one year in prison and fines. Failure to file is therefore not necessarily only a civil matter. The applicable offense, sentencing rules, civil tax liability, and circumstances determine the outcome.
If you are under investigation, consult qualified tax and criminal defense counsel before responding substantively. Roy J. Kahn, P.A. handles criminal defense matters in Miami. No result is guaranteed. This is general information, not tax or legal advice.
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