When someone is convicted of a tax crime, it usually means that they did something illegal in order to avoid paying their taxes. Tax crimes are types of white collar crimes that can be charged in connection with other crimes or as a stand-alone offense. That’s why, if you or a loved one has been charged or convicted of a tax crime, it’s essential that you speak to an experienced criminal defense attorney right away.
However, not all schemes employed to reduce the amount of taxes that you owe are illegal. In fact, the IRS actually has a list of approved ways that allow for this to happen that it refers to as tax avoidance. So how are tax evasion and tax avoidance actually different? Read ahead for our overview of the differences between the two.
Tax Evasion
Tax evasion is a crime that occurs when someone illegally evades payment on their taxes. The most common example of this is when people deliberately misrepresent their assets or how much money they make to reduce the amount of taxes that they owe. There are many ways to do this, like reporting less income than what you actually made or by overstating deductions to reduce your tax liability. Remember, it does not matter if the failure to pay taxes is based upon legitimate or illegitimate earnings.
As taxpayers, we all know that unpaid taxes can cause a lot of problems. In addition to fines and penalties, the IRS has other options in order to make sure you pay your dues, like issuing a tax lien on your property, taking away your passport, and can even lead to the forfeiture of your social security benefits.
However, because tax evasion is a crime, those charged with it also face the very real possibility of going to jail. That’s why it’s so important to speak with an experienced Florida criminal defense attorney right away so that you figure out the best way to move forward.
Tax Avoidance
The main way that tax avoidance differs from tax evasion is that tax avoidance is legal. That’s right – the IRS actually has several approved ways for people to lower their tax liabilities. There are many ways that people can avoid paying their taxes, like making deductions for costs associated with their business or education. But there are other ways too. Do you have a Health Savings Account through your company for medical bills? Or, does your company take costs for transportation out of your paycheck pre-tax? If so, then you are already participating in tax avoidance schemes that are helping to keep your tax liabilities as low as possible.
However, tax avoidance can cause you some trouble with the IRS if you take too much of an advantage of these schemes. People unknowingly and knowingly bend tax laws all the time, so it’s really about intent and whether or not a person has stepped over the line from tax avoidance to tax evasion.
Contact an experienced Florida white collar criminal defense attorney
Committing tax evasion is a serious criminal offense that carries hefty penalty fees and can even send you to prison. That’s why it’s so important to first work with a tax professional in order to make sure you are filing your taxes correctly and on time. If the federal government comes after you, it’s important that you seek the advice of experienced counsel.
At Puglisi Law, we know what it takes to see a favorable outcome in a tax evasion case. If you or someone you love has been charged with federal tax evasion, please contact our Miami office at (305) 403-8063 or visit us at https://puglisicarames.com today.