Federal Tax Evasion Defense Lawyers

Paying less than you owe to the Internal Revenue Service (IRS) is a violation of federal law that can lead to civil or criminal penalties. If you are under investigation or facing charges for tax evasion under 26 U.S.C. Section 7201, you need to engage experienced federal defense counsel promptly.

All United States citizens and residents owe reporting obligations to the Internal Revenue Service (IRS). Citizens and residents must accurately calculate their federal income tax liability, and they must timely pay what they owe. U.S. businesses have similar obligations as well, and they must also report and pay payroll taxes (i.e. Social Security tax) and all other applicable taxes imposed by the Internal Revenue Code.

Failure to pay any federal tax when due is a violation of the Internal Revenue Code, and it can lead to either civil or criminal penalties. Most cases are civil in nature, and the IRS is constantly auditing individual and corporate taxpayers across the country. However, allegations of intentional underpayment or nonpayment can lead to criminal charges, and the penalties for criminal tax evasion are severe.

Are You Under Investigation for Federal Tax Evasion?

Criminal tax evasion investigations are handled by the IRS’s Criminal Investigations Division (IRS-CI). Within the federal law enforcement system, IRS-CI’s role is to, “serve[] the American public by investigating potential criminal violations of the Internal Revenue Code and related financial crimes in a manner that fosters confidence in the tax system and compliance with the law.”

While IRS-CI investigates a multitude of criminal offenses under the Internal Revenue Code and other federal statutes, one of its primary enforcement priorities is tax evasion under 26 U.S.C. Section 7201:

“Any person who willfully attempts in any manner to evade or defeat any tax imposed by this title or the payment thereof shall, in addition to other penalties provided by law, be guilty of a felony and, upon conviction thereof, shall be fined not more than $100,000 ($500,000 in the case of a corporation), or imprisoned not more than 5 years, or both, together with the costs of prosecution.”

What does it mean to “evade or defeat” a federal tax? In essence, it means paying less than you owe. If you are under investigation for tax evasion, this will be a matter to be determined based on the tax burden imposed by the Internal Revenue Code. Your defense attorneys will need to review your federal tax filings and your personal or business financial records in detail to determine whether your federal tax obligations have been satisfied. If it can be shown that you have paid what you owe, then this should effectively end the inquiry. However, if you have underpaid, then you will need to be able to show that your underpayment was not “willful” in order to avoid criminal culpability.

What does it mean to “willfully” attempt to evade or defeat a federal tax? Government Proposed Jury Instruction Number 26.7201-5 highlights a key aspect of the federal crime of tax evasion. It states, in part:

“A person may not be convicted of federal tax evasion on the basis of a willful omission alone; he/she also must have undertaken an affirmative act of evasion. . . . [Defendant] acted ‘willfully’ if the law imposed a duty on him/her, he/she knew of the duty, and he/she voluntarily and intentionally violated that duty. . . . This is a subjective standard: what did [defendant] honestly believe, not what a reasonable person should have believed. Negligence, even gross negligence, is not enough to meet the ‘willful’ requirement.”

Examples of affirmative acts that federal prosecutors can use to pursue charges for criminal tax evasion include:

  • Filing a false or fraudulent return that substantially understates taxable income
  • Keeping a double set of books
  • Creating false entries, invoices, or documents
  • Not keeping books or records
  • Destroying books or records
  • Concealing assets
  • Covering up sources of income
  • “[O]ther conduct whose likely effect would be to mislead the Internal Revenue Service or conceal income”

If you underpaid your federal taxes but you did not do so willfully, then you are not guilty of criminal tax evasion. However, you could still be liable for civil penalties (in addition to payment of the full tax you owe). As a result, when facing a federal investigation for tax evasion under 26 U.S.C. Section 7201, you need to approach your defense strategically, with your priorities being: (i) to avoid any liability at all if possible; and, (ii) if you cannot avoid liability entirely, to ensure that your case is handled civilly rather than criminally.

Put our highly experienced team on your side

Dr. Nick Oberheiden
Dr. Nick Oberheiden

Founder

Attorney-at-Law

John W. Sellers
John W. Sellers

Former Senior Trial Attorney
U.S. Department of Justice

Local Counsel

Joanne Fine DeLena
Joanne Fine DeLena

Former Assistant U.S. Attorney

Local Counsel

Joe Brown
Joe Brown

Former U.S. Attorney & Former District Attorney

Local Trial & Defense Counsel

Amanda Marshall
Amanda Marshall

Former U.S. Attorney

Local Counsel

Aaron L. Wiley
Aaron L. Wiley

Former Federal Prosecutor

Local Counsel

Roger Bach
Roger Bach

Former Special Agent (OIG)

Gamal Abdel-Hafiz
Gamal Abdel-Hafiz

Former Supervisory Special Agent (FBI)

Chris Quick
Chris Quick

Former Special Agent (FBI & IRS-CI)

Kevin M. Sheridan
Kevin M. Sheridan

Former Special Agent (FBI)

Ray Yuen
Ray Yuen

Former Supervisory Special Agent (FBI)

Dennis A. Wichern
Dennis A. Wichern

Former Special Agent-in-Charge (DEA)

Have You Been Charged with Federal Tax Evasion?

If you have already been charged with criminal tax evasion, then you must focus your defense on the specific allegations at hand. As stated in the quote from 26 U.S.C. Section 7201 above, you are facing five years in prison and a $100,000 fine as an individual (plus liability for taxes and interest); or, if your company has been charged, it is facing a maximum fine of $500,000 (plus liability for taxes and interest).

In order to defend against a charge of federal tax evasion, there are a number of strategies that can be utilized. However, determining which strategies are viable in any particular case requires a thorough assessment of the factual and legal circumstances at hand. Some examples of potential defenses to tax evasion include:

1. Inadequate Evidence of Underpayment or Non-Payment of Federal Tax

In order to prove a charge for tax evasion under 26 U.S.C. Section 7201, federal prosecutors must first prove that you underreported your federal tax liability. If there is not sufficient evidence to prove that you submitted a false or fraudulent return (regardless of whether or not you actually submitted a false or fraudulent return), then the government cannot prove its case against you.

2. Inadequate Evidence of a Willful Attempt to Evade or Defeat Tax

The government must also be able to prove that you make a “willful” attempt to evade or defeat tax. If federal prosecutors do not have the evidence required to convince the jury that you intended to avoid tax liability and knowingly filed a false or fraudulent return, then you cannot be convicted of criminal tax evasion even if you paid less than you owed.

3. Inadequate Evidence of an Affirmative Act in Furtherance of the Attempt

Likewise, proving guilt for criminal tax evasion requires evidence that you undertook an affirmative act in furtherance of your attempt to underpay the IRS. Once again, the burden of proof rests with the U.S. Department of Justice (DOJ), and if the DOJ’s attorneys do not have the evidence to prove an affirmative act, then they should not be able to secure a conviction in federal district court.

4. Good-Faith Belief in the Accuracy of the Tax Liability Reported and Paid

If you had a good-faith belief that your returns complied with the Internal Revenue Code, then federal prosecutors cannot prove that you acted willfully in attempting to avoid federal tax liability. Even if your belief was unreasonable, if you truly believed that you were submitting an accurate return, then you did not commit criminal tax evasion under 26 U.S.C. Section 7201.

5. Constitutional Violations Resulting in the Inadmissibility of Evidence

How did the federal government secure its evidence against you? Did federal agents raid your home or office? Did they seize your computer or phone? Did they question you or your employees? While there are numerous ways that federal agents can lawfully collect evidence during a tax evasion investigation, there are also numerous miscues that can lead to evidence being deemed constitutionally inadmissible in court.

Why Do U.S. Taxpayers Choose Oberheiden P.C. for Tax Evasion Defense?

At Oberheiden P.C., we represent individuals and companies nationwide in federal tax evasion investigations and trials. If you are under investigation or facing charges under 26 U.S.C. Section 7201, here are five reasons to choose us to represent you:

  • We are a federal defense law firm. Our practice is devoted to representing clients in federal matters.
  • We are former federal prosecutors and agents. Several of our attorneys and defense consultants are former DOJ attorneys and former investigators with the IRS and other agencies.
  • We have handled thousands of federal matters from both sides. Collectively, our attorneys and defense consultants have handled thousands of federal investigations, grand jury proceedings, and trials from both sides.
  • We do not employ paralegals or junior associates. Unlike other law firms, we do not employ paralegals or junior associates.
  • We have a 95% success rate in federal white-collar cases. As federal defense counsel, we have a 95% success rate helping our clients avoid convictions and sentencing in tax evasion and other white-collar cases.

Contact Us 24/7 for a Free and Confidential Case Assessment

If you are under investigation by IRS-CI or facing federal charges for tax evasion, we encourage you to contact us immediately. To speak with one of our former federal prosecutors in confidence right away, call 888-680-1745 or request a free and confidential case assessment online now.

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