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Is tax evasion really a problem in the United States?

Tax evasion. It sounds like the type of crime that is used by the government to prosecute heinous offenders who have otherwise hidden evidence and appear innocent of wrongdoing. When people think of tax evasion crimes they may think of Al Capone and other mafia leaders or drug lords. In reality, tax evasion is a crime on its own. One the Internal Revenue Service (IRS) can use to recoup funds from any taxpayer that fails to meet their tax obligations and potentially put the accused behind bars.

What exactly is tax evasion? To understand the issue, it is important to understand what tax evasion is. Tax evasion involves more than a taxpayer simply taking advantage of deductions and tax credits. It involves not paying taxes by failing to properly report income.

The IRS can accuse a taxpayer of either deliberate or inadvertent tax evasion. If the IRS accuses a taxpayer of a deliberate violation, it must generally establish the taxpayer intentionally withheld information from the IRS. This willful requirement is not easy to establish. However, if the agency is successful it can pursue more serious penalties against the accused — larger monetary penalties and potential imprisonment.

How much does the government loose due to tax evasion? A recent report finds that one of every six dollars owed in federal tax obligations is not paid.

Who does the IRS investigate? The IRS is most likely to investigate those in the highest income brackets. The agency points to its most recent data (from 2001) showing 61% of tax evasion occurs within the highest income brackets.  

What if the IRS accuses me of tax evasion? Act to protect your legal rights. If you or your business is under investigation by the IRS, get legal representation. An attorney experienced in this area of the law can review correspondence with the IRS and build a case to better protect your interests.

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