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Tax Evasion Explained by a White Collar Defense Lawyer Albuquerque

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A common examples of white collar crime that any white collar defense lawyer Albuquerque has dealt with is tax evasion. Nobody likes paying taxes, but that does not change the fact that tax evasion is still a crime. Under the law, people are obligated to pay their taxes in full or they may be charged with tax evasion. Here are some examples of how the crime of tax evasion may come up.

Mistakes Are Not Necessarily Tax Fraud

Everybody knows that the tax code is enormous, tedious, and difficult for laymen to understand without the help of an accountant or tax professional. It can be frustrating to try to understand even a small part of it. Unsurprisingly, it is not uncommon for lots of people to make mistakes when filing their taxes. Often these mistakes result in underpaying the amount of taxes that are legally owed. But don’t worry about small mistakes leading to charges of tax fraud. The IRS must show that a person intentionally tried to underpay taxes in order to win charges of tax fraud. If you underpay, you may be faced with having to pay back what is owed in back taxes and possibly a fine, but it is highly unlikely to lead to criminal charges.

Understand Tax Basics

The basics of every resident’s tax obligations are easy enough to understand. Each year, Americans must declare their total income for the previous calendar year, their family size, and certain expenses. Based on these figures, the tax code is used to calculate a figure called the Adjusted Gross Income, which is essentially total income minus certain expenses (called “deductions”). The resident owes a certain percentage of that number in income tax. People may be able to lessen their tax burden if they declare certain tax “credits” that are usually passed by Congress to try to motivate certain behavior. For example, there may be a tax credit available for people who drive electric vehicles instead of gas-powered ones. Certain businesses may be able to claim a credit for hiring people with criminal backgrounds to help them get back on their feet.

What Constitutes Tax Fraud?

The most obvious and blatant form of tax evasion is simply neglecting to file one’s tax return. If the IRS has information on a person’s income but no tax return has been filed by that person for a given year, it is easy for them to see that something is missing. Another common form of tax evasion seen by a white collar defense lawyer Albuquerque is under-reporting of income. This is especially common in professions that receive a large amount of under-the-table income or deal largely in cash, such as wait staff, hotel employees, and retail store owners. Additionally businesses might artificially inflate their business expenses to make it seem like they can take larger deductions than they were legally allowed. All these acts may constitute tax fraud and result in an investigation by the IRS.

Contact a White Collar Defense Lawyer Albuquerque

For more information about tax fraud and how to avoid charges of tax evasion, contact a White Collar Defense Lawyer Albuquerque at Twohig Law Firm. Call (505) 898-0400.

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