Perhaps one of the most infamous criminals the United States has ever known, Al Capone had many ties to the criminal underworld and had been in and out of jail for many petty offenses before he was finally convicted of tax evasion on October 18, 1931. Capone spent the next 11 years in federal prison, was fined $50,000, and had to pay $215,000 in back taxes.
Even today tax evasion remains a common criminal offense with notable celebrities such as Martha Stewart and Joe and Teresa Guidice getting sentenced to jail time. But what’s the truth behind tax evasion? Is it just that these people didn’t know how to fill out those pesky IRS forms or were they really trying to get away without paying the government?
Types Of Tax Evasion Crimes
There are two kinds of tax evasion, the willful attempt to evade or defeat the assessment of a tax and the willful attempt to evade or defeat the payment of tax. When a person attempts to evade the assessment of taxes they understate their income for the year thereby leading the IRS to calculate a lower amount for taxes owed. This is the most common form of tax evasion in the United States. In order for a person to evade the payment of taxes they would have to move or conceal their taxable assets after their taxes have been assessed.
How Does A Person Evade Their Taxes
There are a variety of ways in which a person can attempt to evade their taxes. These attempts almost always involve some type of concealment of money or assets. An individual could do this by using bank accounts of family members to hide their money from the IRS. They could also use cash to make the majority or all of their purchases; this makes it much harder if not impossible for the government to trace and understand how much the individual is earning and spending. A person could also put assets such as properties in the names of their family members and claim that they have no assets to use to be able to pay their taxes. Another way that an individual could attempt to evade their taxes is by falsely filing for bankruptcy.
Criminal Fine Enforcement Act of 1984
On October 30, 1984, after the Criminal Fine Enforcement Act was passed, the maximum fine allowed for felony offenses increased to $250,000 for individuals and $500,000 for corporations. These fines can be imposed on individuals who attempt to evade taxes, advisors to these individuals, guardians or executors of estates and to corporations. A person can even be prosecuted if they even attempted to help another evade their taxes.
The Importance of Willfulness
One key aspect of all tax evasion cases is that of willfulness; it has been defined as the “voluntary, intentional violation of a known legal duty” (Check v. United States). This means that the individual or corporation knowingly acted to hide their money or assets then they’re liable for the fraud. Willfulness can be the difference between a conviction and years in federal prison. If the person did not intend to evade their taxes then that is a viable defense for trial. Another defense is if the individual did not believe that they were violating any tax laws.
When does the Statute Of Limitations Come Up
There is a 6 year limit for you to be charged with a tax offense case. This time period begins from the date of the last act of alleged evasion takes place. This statute continues to run on if the person becomes a fugitive. There are cases where the statute of limitations can be suspended or extended for a certain period of time.
If you or someone you know has been charged with tax evasion for assessment or payment, contact Orange County criminal defense attorney Karren Kenney for assistance. Call (855) 505-5588 for a free phone consultation.