The elements of tax evasion

On Behalf of | Jan 6, 2020 | White Collar Crimes |

Taxpayers in New York could be charged with tax evasion if they willfully fail to report income or pay taxes owed. It is important to note that the IRS generally won’t prosecute someone for making an honest mistake on a tax return. In such a scenario, an individual will simply be asked to pay what he or she owes plus interest or a penalty.

A person could incur penalties for failing to file a tax return for a given year. This is because the government has no way of knowing how much an individual might owe without getting a return. Businesses that conduct transactions in cash, such as restaurants or other service companies, may be more prone to improperly reporting income. Employees who make the majority of their money through tips might also be more likely than others to improperly report their income.

Companies may also attempt to evade taxes by inflating their expenses in a given year. Individuals who claim credits or deductions despite not being able to justify doing so might be engaging in tax evasion. Tax credits or deductions are often designed to get people to take actions that the government considers to be in society’s best interest. For instance, businesses might get credits for operating in certain areas or hiring employees with a criminal background.

Although tax evasion is considered to be a white-collar crime, an offender might face significant penalties. For instance, a defendant may be sentenced to time in jail or prison as well as forced to pay back taxes owed plus interest and penalties. An attorney could assert that a client made an honest mistake or has documents proving that he or she was entitled to a tax credit.

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