Tax evasion charges are very serious. If you are being investigated or have been charged with tax evasion in Frisco, Texas, you should immediately reach out to an experienced tax evasion attorney.
What is Tax Evasion in Frisco?
Tax evasion is when a person deliberately avoids paying due taxes. This could take the form of either filing a fraudulent tax return or refusing to file a tax return at all. Making a simple mistake on your returns does not rise to the level of tax evasion. You must have purposely tried to defraud the government. Individuals, businesses, trusts, and corporations can all commit tax evasion.
Tax evasion is different than tax avoidance. There are several ways that individuals legally lower their tax liability, including making contributions to IRA accounts or making charitable donations. These actions are legal and distinct from tax evasion.
Examples of Tax Evasion Schemes
Individuals engage in several different methods to illegally avoid paying taxes. Some common schemes of tax evasion in Frisco include:
- Under-reporting or omitting income.
- Claiming inflated or false deductions.
- Claiming fraudulent expenses or losses.
- Living out of the company. This refers to when a business owner uses the company’s money to pay for personal expenses, like travel or vehicles.
- This refers to when a corporation deducts income tax payment from their employees’ salaries but never remits the payment to the IRS.
- Concealing assets.
- Paying employees in cash and not reporting wages to the IRS.
Penalties for Tax Evasion in Frisco, Texas
Tax evasion in Frisco is prosecuted aggressively and could result in severe penalties. The penalty will vary from a Class C misdemeanor to a First-Degree felony depending on the particular type of fraud that the individual engaged in and how much is owed in taxes. Individuals will face a maximum of up to five years in prison and up to a $100,000 fine ($500,000 in the case of a corporation). Additionally, individuals may be required to pay restitution or participate in community service.
The penalty is also dependent on whether you are charged at the state or federal level. If a business is convicted of state tax evasion, their sales permit could be suspended or even revoked. Because Texas does not have an income tax, the state depends heavily on its sales tax and takes tax evasion charges by businesses extremely seriously.
In addition to the legal consequences, an individual convicted of tax evasion may suffer damage to their reputation, career, and finances—not to mention straining the individual’s relationships with family, friends, and colleagues.
Tax Evasion Defenses
The government aggressively prosecutes tax evasion, and fighting these charges is difficult. However, there are several defenses that an experienced tax evasion attorney may employ depending on the specific facts of your case.
- There was no criminal intent. To be convicted, the government must prove beyond a reasonable doubt that you intended to commit tax evasion. Your attorney could argue that you made an inadvertent mistake, you did not understand the tax forms, or there was confusion regarding a gray area of the tax law.
- You were given bad advice by your tax attorney, a CPA, or other qualified tax professional.
- You submitted an amended return, and now your payments are sufficient. It is advised that you obtain legal representation before approaching the IRS about making payments.
- There is no tax due and owing. If the IRS is alleging under-reporting income, your attorney may be able to help you find expenses that were not reported that offset the under reported income. If there is a net liability of zero, you cannot be convicted of tax evasion.
- Evidence was illegally obtained. Your attorney could argue that the evidence that the government has was obtained unlawfully and, therefore, must be thrown out. Without sufficient evidence, the government will be unable to prove their case beyond a reasonable doubt.
Frisco Tax Evasion Attorney
It is critical that you reach out to a Frisco tax evasion attorney as soon as possible. If you ignore the initial notice from the IRS or state agency, the problem will not just go away. Instead, it will be elevated and could result in significant fines and a prison sentence.
Hiring an experienced defense attorney can make a big difference in your case. Philip D. Ray will fight your tax evasion charges with an aggressive and strategic defense. Call Philip D. Ray today to schedule a consultation at (469) 588-6770.