Tax evasion is a serious federal offense in Texas. If you are being investigated for tax evasion in Frisco, you should immediately reach out to a qualified criminal defense attorney. The right attorney can make a big difference in the outcome of your case. Read below for more information about tax evasion charges in Frisco, Texas.

Tax Evasion is a Federal Offense in Texas 

What is Federal Tax Evasion?

According to 26 U.S.C. §7201, tax evasion occurs when an individual or business intentionally underpays or fails to pay taxes due. Tax evasion must be intentional and requires an affirmative act to evade or attempt to evade a tax. Mistakes and carelessness are not considered tax evasion.

There is a difference between tax evasion and tax avoidance. Limiting your tax liability through legal means, like claiming all relevant business expenses or categorizing assets in more favorable ways is not a crime.

What Are Examples of Federal Tax Evasion in Texas?

Individuals can commit tax evasion in various ways. Common examples of federal tax evasion in Frisco include:

  • Underreporting taxable income,
  • Concealing taxable assets,
  • Overstating business expenses or deductions,
  • Failing to make required tax payments,
  • Keeping inaccurate financial statements, and
  • Dealing in cash to avoid being taxed.

The IRS has agents trained to investigate and detect tax evasion. These offenses are primarily discovered through audits and informants (old business partners, ex-spouses, etc.).

What are the Penalties for Federal Tax Evasion in Texas?

Tax evasion is a felony offense and is aggressively prosecuted by the federal government. If you are convicted of tax evasion in Texas, you will face severe penalties. It is punishable by a maximum prison sentence of five years and a fine of up to $100,000. If the defendant is a corporation, the maximum fine increases to $500,000.

In addition to jail time and fines, the judge may order offenders to reimburse the government for the cost of prosecution. These expenses can be very significant. Typically, the judge will also order restitution and require the defendant to repay the taxes they failed to pay to the government.

The sentence you receive will depend on the unique facts of your case and your criminal history. Your attorney will play a significant role in advocating for the lowest possible sentence. A conviction for tax evasion is life-changing, so it is critical to have a qualified attorney on your side.

What are Defenses to a Federal Tax Evasion Accusation in Texas?

Various defense strategies can be used to fight tax evasion charges. Your defense will depend on the unique circumstances of your case. Common defenses against tax evasion charges in Frisco include:

  • Lack of intent. The prosecution must prove that you intentionally defrauded the IRS to avoid paying your taxes. You can argue that you made a mistake, such as a miscalculation, and therefore, lacked the required intent. Filing taxes can be complicated; it is easy to file an incorrect return.
  • The advice of counsel. It is a defense if you relied in good faith on an individual who was competent to give tax advice, such as a CPA or other qualified tax professional.
  • Attack the method of calculation. You can argue that the calculations that the government used are inaccurate. There may be offsetting liabilities that reduce your tax liability.
  • Statute of limitations. In general, the government must file tax evasion charges within six years of the alleged violation. Once this time period passes, the government cannot bring charges, even if they have sufficient evidence.

What Should You Do If You Are Facing Tax Evasion Charges in Frisco?

If you are being investigated for tax evasion, you should reach out to a Frisco tax evasion attorney as soon as possible. Tax law is complicated, so it critical to reach out to an attorney experienced in this area of the law.

It is critical to act early. The steps you take during an audit or investigation can significantly impact the outcome of your case. It may be in your best interest to work out a negotiated plea deal before you are charged. 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.

Federal Tax Evasion Attorney

Hiring an experienced Frisco defense attorney can make a big difference in your tax evasion 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.