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San Jose tax audit attorney for offshore complianceTaxpayers often make errors on their tax returns that are due to simple miscalculations or misidentification of assets and income. These mistakes rarely lead to criminal charges, and they can typically be rectified with help from a qualified tax lawyer. However, when a taxpayer or business makes a deliberate effort to avoid tax liability, this may constitute illegal tax evasion. Tax evasion is a serious crime punishable by up to 5 years’ incarceration and fines up to $250,000 for an individual or $500,000 for a corporation. In recent years, the Internal Revenue Service has dramatically increased enforcement of income compliance with regard to offshore accounts. The United States, however, is not the only country that is concerned about the increasingly common crime of offshore tax evasion. Recently, the U.S. was joined by several other countries in a “day of action” against offshore tax evasion schemes.

IRS Continues to Investigate Potential Facilitation of Tax Evasion

The Sixteenth Amendment to the U.S. Constitution and a number of other laws dictate Americans’ tax obligations. In order to avoid paying their fair share of taxes, however, some individuals and businesses transfer assets outside the United States and into offshore tax shelters. Tax evasion is a massive problem that is estimated to have cost the U.S. federal government $458 billion per year from 2008 to 2010. Tax evasion schemes occur in developed countries around the world. 

In 2018, the Joint Chiefs of Global Tax Enforcement was formed by leaders in the United States, the United Kingdom, the Netherlands, Canada, and Australia to coordinate efforts to fight global tax evasion. The recent “day of action” occurred as part of an ongoing investigation into a financial institution in Central America that may be facilitating tax evasion and money laundering. The Joint Chiefs of Global Tax Enforcement have reason to believe that some taxpayers are anonymously hiding assets and laundering profits from criminal activities using this institution. Using interviews, subpoenas, search warrants, data analytics, and other intelligence, a great deal of information was uncovered about this institution and the activities taking place there. A number of civil and criminal actions are expected to result from the information gained during the investigation.

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San Jose tax evasion defense lawyerIf you are being investigated for tax evasion, you may feel lost, confused, and concerned about the possible penalties you may face. The federal offense of tax evasion occurs when an individual or corporation intentionally and systematically attempts to avoid paying taxes. The offender may falsify documents, fail to report income, or use other illegal tactics to reduce his or her tax obligations. In the last decade, countries around the world have worked together to prevent individuals from concealing income in foreign banks. Tax evasion can include any procedures that allow assets, financial instruments, or revenue to go untaxed or be taxed at a lower rate. The potential penalties for tax evasion can include heavy fines and incarceration. If you are being audited by the IRS, you should know how federal laws may affect you.

Federal Law Regarding Tax Evasion

Tax evasion is a willful act. Simply making mistakes on your tax return will not result in tax evasion charges. Section 7201 of the Internal Revenue Code describes the offense of tax evasion. In order for the IRS and other authorities to prove that a party engaged in tax evasion, they must prove that:

  • The party has an unpaid tax liability.
  • The party intentionally took actions to evade or avoid taxes.
  • The party had “specific intent” to evade his or her duty to pay a certain tax.

Because tax evasion is a criminal matter, prosecutors must prove these elements beyond a reasonable doubt to convict a person for tax evasion.

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Posted on in IRS Scams

tax scams, San Jose tax attorney, tax evasion, false billing, fraudulent return preparationEvery person must pay taxes. No matter one’s job, income level, or the amount of assets owned, most people are unhappy with the amount that the government takes. But while there are many ways to legally minimize the amount of taxes a person is obligated to pay, some people take additional, illegal steps to evade paying taxes. 

Tax fraud is a crime that can result in serious consequences; however, many people also fall prey to tax scams that promise to substantially reduce or completely eliminate the taxes a person must pay. In order to avoid criminal prosecution for tax evasion, it is important to recognize and avoid these abusive tax schemes. 

Types of Abusive Tax Schemes

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San Jose tax fraud attorney, tax audit, tax fraud, tax fraud penalties, tax evasionBenjamin Franklin once said that nothing in this world is certain except death and taxes. This common saying is as true today as it was 200 years ago—paying taxes is a civic duty that is required of everyone in the United States. However, people often attempt to cheat on their taxes and avoid paying what they owe, and this can result in serious consequences. If you are facing a tax audit, you should understand the potential consequences of tax fraud or tax evasion.

IRS Tax Fraud Penalties

Tax fraud can take a number of different forms, including:

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Posted on in Taxation Law

tax evasion, San Jose tax attorney, tax audit, taxation law, tax liabilityYou may not be a millionaire celebrity or a huge corporation, but that does not mean you cannot be guilty of tax evasion. Even though these are the types of people and entities typically associated with tax evasion, any person who files tax returns could find himself or herself under investigation for this serious crime.

According to the Internal Revenue Code § 7201, tax evasion involves “[a]ny person who willfully attempts in any manner to evade or defeat any tax imposed by this title or the payment thereof.”

Thus, this law sets forth two kinds of tax evasion:

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