Strong Defense Against Tax Evasion Charges in the U.S.
Brown, PC represents businesses and individuals facing criminal tax charges throughout the United States. Tax evasion is one of the most serious and frequently charged tax crimes in this country. We have the proven ability to defend clients against these allegations in courts in Texas and across the nation.
The best defense is a good offense. In the context of defending against criminal tax allegations, that means getting your lawyer involved as quickly as possible. The Dallas-based tax evasion defense lawyers at Brown, PC help level the playing field against the power and resources of the IRS and its law enforcement arm, the Criminal Investigations Division. Led by former U.S. Department of Justice Tax Division attorney Lawrence Brown, together with a team of experienced IRS Enrolled Agents and associate attorneys, we are uniquely positioned to help you minimize the impact of tax evasion charges or defeat the charges entirely.
Exploring All Possible Defenses to Tax Evasion Charges
There are myriad ways to defend against tax evasion allegations, and you can be confident in our mastery of all of them. Just a few examples of possible defenses in these types of cases are:
- Advice of counsel: Many of our clients are accused of tax evasion despite their best efforts to ensure that their financial activities were all above-board. If you received advice from another tax lawyer, a CPA or another qualified tax professional, and that advice results in an IRS investigation or criminal charges, you may have a viable defense.
- Lack of willfulness: In all criminal tax cases, the government must prove that the defendant knowingly and willfully violated the law. An honest mistake or confusion regarding a gray area of the tax law or accounting principles does not constitute criminal conduct.
- Voluntary disclosure: Self-reporting tax violations before the IRS finds out about them can be a very effective way to avoid prosecution. The IRS Voluntary Disclosure Program and Offshore Voluntary Disclosure Program allow taxpayers to come forward and report tax evasion or fraud and pay a monetary penalty. In many (but not all) cases, the IRS will then forego criminal prosecution. It is highly recommended that you obtain legal representation before approaching the IRS.
- No tax due and owing: In tax evasion cases, the IRS may allege that the target underreported income. In many cases, this allegation is true. However, we may be able to find expenses that were not reported that offset the underreported income, resulting in a net liability of zero.
A conviction for tax evasion can change your life forever. By putting the skill and strength of the Brown PC defense team on your side, you can minimize your risk and maximize your chances of success.
Texas Tax Evasion Attorney for Audits, Investigations and Criminal Cases
While Texas does not have an individual income tax, individuals and businesses in the state may still owe various taxes to the Texas Comptroller and the Internal Revenue Service (IRS). The Texas Comptroller and IRS vigorously enforce taxpayers’ obligations, and non-payment can lead to serious charges—including criminal charges in some cases. If you are facing scrutiny from the Texas Comptroller or the IRS, you need an experienced Texas tax evasion attorney on your side.
Our attorneys rely on decades of relevant experience to provide effective legal representation in all Texas Comptroller and IRS matters. We handle audits and investigations targeting individuals and businesses, and we serve as defense counsel in criminal tax evasion cases as well. Whether you are facing an audit, you need to challenge the outcome of an audit, or you need to fight to avoid criminal penalties, we can use our experience to deal with the Texas Comptroller or the IRS effectively on your behalf.
What Constitutes Tax Evasion?
Tax evasion involves using illegal means to avoid individual or corporate tax liability. It is different from tax avoidance, which involves using strategic planning to minimize an individual’s or business’s tax liability in accordance with the Texas Tax Code or Internal Revenue Code.
When facing scrutiny or charges for potential tax evasion, presenting an effective defense starts with understanding the specific allegations at issue. In some cases, it will be possible to successfully defend against allegations of tax evasion by demonstrating a legally compliant tax avoidance strategy. In others, it will be necessary to defend against the government’s allegations by other means.
Some common examples of allegations in federal tax evasion cases include:
- Failing to report or under-reporting taxable income, gifts, or gross receipts
- Under-reporting a company’s employment tax liability (including, but not limited to, paying employees in cash)
- Claiming false or inflated credits, deductions, exemptions, or losses
- Claiming business expense deductions for personal expenses
- Failing to disclose foreign income or offshore accounts
Documentation, or substantiation, is often a key issue in federal tax evasion cases. When scrutinizing taxpayers’ deductions, for example, the IRS expects to find clear documentation that supports the deductions claimed in a taxpayer’s returns. If this documentation is lacking or inconsistent, or if no such documentation exists, this can significantly increase the risk of facing civil liability or criminal prosecution.
But, while documentation can be important, taxpayers must be extremely careful about voluntarily sharing their financial records with the Texas Comptroller or IRS. Before doing anything that could increase their risk of prosecution, taxpayers need to discuss their options and strategy with an experienced Texas tax evasion attorney. At Brown Tax P.C., our attorneys can help you make the right decisions. We can execute a defense strategy focused on protecting you (or your company) in light of the specific documentation, facts, and circumstances at hand.
Red Flags for Tax Evasion (According to the Texas Comptroller and IRS)
When conducting tax evasion audits and investigations, the Texas Comptroller and IRS look for several “red flags.” While none of these are necessarily signs of tax evasion, they will be indicative of tax evasion in many cases. As a result, if any of these are an issue in your (or your company’s) case, you will need to address them carefully with the help of your Texas tax evasion attorney:
- Failure to file tax returns
- Failure to make estimated tax payments
- Inadequate documentation to substantiate the contents of a taxpayer’s returns
- Dealing primarily in cash or cryptocurrency
- Ignoring communications from revenue agents or refusing to cooperate during an audit or investigation
While these can be problems, they don’t have to be. Oftentimes, there are legitimate explanations for what appears to be an unlawful and willful attempt to evade individual or corporate tax liability. Additionally, even if an act or omission results in underreporting or underpayment, this alone does not support allegations of criminal tax evasion. Criminal charges for tax evasion require evidence of knowledge and willfulness as well and disputing the government’s evidence of knowledge or willfulness can be an effective defense strategy in many cases.
Penalties for Tax Evasion in Texas
Under federal law, the penalties for tax evasion in Texas are severe. In cases involving taxes owed to the Texas Comptroller, tax evasion charges can carry thousands of dollars in fines and years or decades of imprisonment. In federal tax evasion cases, individuals accused of underpaying the IRS can face five years in prison and a $100,000 fine, while businesses can face fines of up to $500,000.
In many cases, tax evasion investigations can lead to other criminal charges as well. These include resale or exemption certificate fraud and making false declarations under penalty of perjury, among others. If charged with multiple offenses, individuals and businesses targeted for tax evasion can face aggregate penalties far in excess of those discussed above.
Federal Charges Related to Tax Evasion
In addition to defending clients against federal tax evasion charges, our attorneys serve as defense counsel for individuals and businesses facing charges for all types of related offenses. This includes (but is not limited to) charges such as:
- Failure to Collect and Deposit Employment Tax in Violation of Section 7215
- Removal or Concealment with Intent to Defraud in Violation of Section 7206(4)
- False or Fraudulent Statement Relating to a Closing Agreement in Violation of Section 7206(5)
- Willful Failure to Collect or Pay Over Tax in Violation of Section 7202
- Aiding and Abetting in Violation of 18 U.S.C. Section 2
- Aiding or Assisting in the Preparation of a False Return or Document in Violation of Section 7206(2)
- False Statements in Violation of Title 18 U.S.C. Section 1001
- Statute of Limitations in Criminal Tax Cases
- Attempting to Interfere with Administration of Internal Revenue Laws in Violation of Section 7212(a)
- Attempting to Evade or Defeat A Tax in Violation of Section 7201
- False or Fraudulent Returns in Violation of Section 7206(1)
- Fraudulent Withholding Exemption Certificate in Violation of Section 7205 (a)
- What is Venue and How is it Determined?
- Failure to File a Return, Supply Information, or Pay Tax in Violation of Section 7203
- Money Laundering Relating to Tax Offenses in Violation of Title 18 U.S.C. Section 1956
- Delivering Fraudulent Returns, Statements, or Other Documents to the IRS in Violation of Section 7207
- False, Fictitious, or Fraudulent Claims in Violation of Title 18 U.S.C. Sections 287 and 286
Regardless of the circumstances involved, if the Texas Comptroller or IRS is looking into your (or your business’s) tax history, you need experienced defense counsel. Our team can help, and you can contact us to speak with a Texas tax evasion attorney in confidence today.
Contact a Texas Tax Evasion Attorney
If you are facing criminal tax charges related to tax evasion or avoidance in Texas or anywhere in the United States, the legal team at Brown, PC is ready to defend your rights. Call 888-870-0025 or contact our Fort Worth law office online for a consultation.