If you transfer assets in the hope of avoiding those assets being collected or of stopping paying federal income taxes, you are in violation of the Internal Revenue Code and you could be subject to serious criminal and civil penalties. Federal courts have ruled that there is little difference in the criminality of evade payment of taxes rather than evading the assessment of taxes. Tax evasion is a serious offense and may be punished in certain circumstances by prison terms.
If you are concerned that the IRS will dig into your tax history, you would do well to consider seeking help from the tax law offices of David W. Klasing. Our dual-licensed tax and CPA lawyers have the knowledge and resources to prepare your defenses against the federal government. Learn more about our services by calling us at (800) 681-1295 or Schedule a discounted initial consultation online here.
Is the transfer of assets to avoid paying taxes an affirmative act of tax evasion?
There is a difference between willful and unintentional violations of the tax code. Merely not paying taxes is not sufficient to constitute a charge of intentional tax payment fraud. Government prosecutors will seek affirmative indictment on the part of the defendant. The affirmative act must have the effect of deceiving or concealing the existence of income or assets.
If your act of transferring assets out of the eyes of the federal government misinterprets your tax liability or your ability to pay the taxes you owe, it would have the legal effect of deceiving or concealing for tax reasons. Transferring assets to avoid paying taxes would be viewed by a prosecutor (and jury) as an affirmative act of tax evasion. As such, you could be charged with tax evasion for any attempt to improperly transfer assets.
Is there a difference between tax evasion and tax evasion?
The history of the case law treatment of tax evaders and tax evaders is complex. Court decisions in the 1960s (in particular the decision of Sansone v. United States) distinctly defined the two offenses. However, recent decisions suggest that several of the federal circuit courts treat the two offenses as one and the same. Recent court trends indicate that both offenses fall under the federal tax avoidance law known as the Article 7201.
The article reads as follows: “Any person who deliberately attempts in any way whatsoever to evade a tax imposed by this Title or its payment shall, in addition to the other penalties provided for by law, be guilty of ” a crime and, upon conviction, is liable to a fine of not more than $ 100,000 ($ 500,000 if it is a legal person), or imprisoned for up to 5 years, or both, as well as the costs of prosecution. “
The Ninth Circuit held at United States vs. Wrong (1991) that article 7201 “proscribes the single crime of tax evasion, a crime which can be committed either by avoiding taxation or by evading the payment of taxes”.
With such a range of lawsuits, expect the government to invoke Section 7201 if you are trying to move money to avoid the tax assessment. Section 7201 has serious financial and personal consequences. If you hope to avoid them, your best bet is to enlist the help of our Dual-licensed tax lawyers and CPAs.
Can you be charged with tax evasion for transferring assets if you don’t owe anything?
You can be charged with fraud under the Internal Revenue Code even though you owe the government no tax balance owing. Attempted tax evasion is a crime in itself. Crime comes from the attempt. Therefore, it does not matter in the eyes of the law if you had an unpaid tax balance owing at the time of the affirmative act which constituted an attempted tax evasion.
The only impact your tax balance (or lack thereof) will have on tax evasion charges for attempting to avoid payment is the penalty that can be imposed if you are found guilty. For example, $ 30,000 Federal income tax evaded is equivalent to one year in prison under federal sentencing guidelines.
What if I accidentally broke the tax code?
If you’ve transferred assets and avoided taxes without realizing you were breaking the law, you may still be able to avoid the civil and / or criminal tax penalties associated with non-compliance. You can choose to voluntarily disclose the tax irregularity to the IRS.
Voluntary disclosure is available for taxpayers who have made honest mistakes in their previous tax returns or other reporting documents. By engaging in the voluntary disclosure program, a taxpayer may be able to avoid the most severe civil and criminal penalties for non-compliance.
You should never attempt to engage in voluntary disclosure without the assistance of tax attorneys and dual-licensed CPAs at tax law offices in Canada. David W. Klasing. Disclosure is a delicate process and no one should go after the IRS without professional help.
Questions about tax liability and asset transfer? Get the help you need
Before you get into a situation that can quickly get out of hand, you should speak to tax attorneys and dual-licensed CPAs at tax law offices across Canada. David W. Klasing. Remember that tax evasion is a broad and severe charge with serious consequences. You deserve to know all the facts. Call us to schedule a discounted initial consultation to assess your situation at (800) 681-1295 or plan online.
To see the the full version of this article here:
Public contact: Dave Klasing Esq. MS-Tax CPA, [email protected]
SOURCE Taxation Firms David W. Klasing, PC