Tax evasion accusations are serious and should not be taken lightly. The Internal Revenue Service (IRS) performs criminal investigations and employs greater than 2,000 special agents to investigate complex tax crimes. When individuals intentionally refuse to file an income tax return, when one is required, or report incorrect information on a tax return, the behavior is considered fraudulent and may be considered a crime.
In general, there are four different types of tax crimes that the IRS investigates. The IRS investigates legal sources of income incorrectly reported; illegal sources of income; narcotics-related financial crimes; and counter-terrorism financing. Tax evasion may be alleged by the IRS's criminal investigators in situations when an individual is accused of understating their income; overstating their expenses; making erroneous claims for credits or exemptions; or failing to report taxable income.
There can be serious potential penalties and consequences associated with tax-related crimes such as tax evasion. Individuals accused of tax evasion and other tax-related crimes can face one year imprisonment for each year the IRS identifies a tax return should have been filed and a fine of up to $25,000 for every tax year involved. Individuals who have provided false information on a tax return may face criminal and civil penalties.
Because the IRS uses a variety of methods to investigate alleged tax crimes, it is important for individuals who have been charged with a tax crime to be familiar with their criminal defense rights. Understanding how to evaluate the facts and circumstances the accused individual is facing in order to develop a strong criminal defense strategy is important when accused of tax crimes.