Last Updated on: 21st October 2023, 09:10 am

What to Do if You’ve Been Charged with Tax Evasion – Advice from a Federal Defense Lawyer

Getting that letter in the mail saying you’re being investigated for tax evasion can be terrifying. Your palms start sweating, your heart races, and your mind goes to the worst case scenario. But don’t panic! There are things you can do to protect yourself. As a federal defense lawyer whose represented numerous clients charged with tax crimes, I’m here to give you some advice.

Don’t Try to Handle This Alone

The absolute first thing you need to do is hire a lawyer–and I don’t just say that because I am one! Tax cases are highly complex, and you need someone experienced in federal tax law to look at the specifics of your case. A common mistake people make is thinking they can just explain what happened themselves. Don’t try to talk your way out of this alone. I can’t tell you how many times I’ve seen that backfire. Let your lawyer do the talking.

Gather Your Records

Next, you need to gather up any records relevant to your case. This includes things like:

• Tax returns
• Bank statements
• Accounting records
• Business records
• Loan documents
• Titles, deeds, etc

Basically, gather anything related to the areas of your finances the IRS is looking into. Having organized records will help your lawyer better understand your situation and build the best defense.

Don’t Destroy or Alter Any Documents

It may be tempting to shred any incriminating documents, or go back and amend records. But this could be seen as obstruction of justice, which is another crime! Let your lawyer advise you on properly preserving records.

Hire a Tax Audit Defense Lawyer

A tax audit defense lawyer is different than a tax evasion defense lawyer. If you know you are just facing an IRS audit, you may want to look into an audit defense specialist. They can help negotiate with the IRS during the audit process. A tax evasion defense lawyer is a criminal defense lawyer that specializes in defending those charged with criminal tax violations.

Understand the Charges and Penalties

There are a variety of tax crimes you could be charged with, including¹:

• Tax Evasion – This is purposefully trying to avoid paying taxes you owe, by hiding income, lying on returns, etc. It carries up to 5 years in prison.
• Filing a Fraudulent Return – Penalties can include fines up to $100,000 and imprisonment up to 3 years.
• Failure to File – If you don’t file your taxes or provide required information, you could face a fine or imprisonment up to 1 year.
• Employment Tax Evasion – Not paying payroll taxes for employees can result in fines and up to 5 years imprisonment.

Your lawyer will look at the specific charges against you and the associated penalties. This will help shape the defense strategy.

Explore Possible Defenses

There are a number of defenses that your lawyer may use to fight tax evasion charges²:

• You lacked willful intent – For some tax crimes, the prosecution has to prove you knowingly and intentionally violated tax law. Your lawyer can argue you simply made a mistake or oversight without willful intent.
• No tax deficiency – In some cases, your lawyer may argue the IRS made an error in their tax calculation. If no additional tax is actually owed, it weakens the case.
• Reliance on a tax professional – Courts have ruled that a taxpayer’s reliance on the advice of a tax professional can be a defense in some instances.

A knowledgeable tax evasion lawyer will analyze the intricacies of your case to craft the strongest defense strategy possible.

Be Cautious of the IRS Offer-in-Compromise Program

The IRS has an Offer-in-Compromise program that allows you to settle your tax debt for less than the full amount owed under certain circumstances. However, be very cautious about submitting one of these offers if you are being criminally investigated or charged. Anything you admit to in the offer can potentially be used against you, and may compromise your constitutional rights³.

Consider Trial Options

If a favorable plea deal can’t be reached, you still have the right to take your case to trial. Your lawyer will discuss whether a bench trial or jury trial is preferable. They will also develop an overall trial strategy focused on creating reasonable doubt around the prosecution’s charges.