Tax Evasion and Tax Fraud: How Are The Two Different?
Everyone knows that tax laws in the United States are extremely complicated and difficult to understand. In many situations, it is challenging to comply with every applicable tax rule and regulation, which can leave you in a difficult situation. Everyone wants to minimize how much they pay in taxes, and depending on how you execute, it can land you in hot water.
If you have been charged with tax fraud or tax evasion, it is important for you to have an understanding of what that means and what types of penalties that may entail. Whether the actions that led to the charges were intentional or done unwittingly, Abdallah Law can help you deal with the situation properly to avoid further problems.
What is Tax Fraud?
Tax fraud itself isn’t a specific type of violation of tax law, but more of an umbrella charge used when someone violates one or more of the many different laws in place. When charged with tax fraud, the IRS must show that not only did you fail to pay the taxes that are due, but that it was done intentionally to defraud the government of the money they are allegedly owed. This has a fairly high burden of proof since they need to show your intent.
The penalties associated with tax fraud are serious, but they are not as harsh as those you’ll see if found guilty of tax evasion. In general, the penalty will be a fine that is up to 75% of the amount that was underpaid. This would be in addition to having to pay the amount that was underpaid as a result of the tax fraud.
What is Tax Evasion?
Tax evasion is a specific crime that can fall under the umbrella of tax fraud. When charged with tax evasion, the IRS needs to show that you intentionally and deliberately misrepresented your taxable income in order to reduce the amount of taxes that you have to pay. There are many ways that someone can misrepresent information including falsification of documents, overstating expenses, failing to report income, creating false receipts, claiming dependents who don’t exist, and much more. The key to an IRS case for tax evasion will be showing that the issues were deliberate and not simple mistakes.
Penalties for tax evasion can be quite severe. If convicted, you will have to pay a large penalty, which can be over $100,000 depending on the situation. In addition, you may face a prison term of as many as five years. In some cases, you’ll be required to pay for the court and legal costs incurred during the case as well.
Get the Legal Help You Need
No matter what type of charges you are facing, you need to have an effective defense strategy. Even if you legitimately believe you did violate the tax laws, having an aggressive Chicago white collar criminal defense attorney at your side can help to minimize the risk of serious issues and help to keep any penalties to a minimum. Contact Abdallah Law to discuss your situation. Let us help protect your rights throughout this important legal process.