An individual or business involved in a criminal tax investigation may ultimately be prosecuted for specific revenue offenses (contained in Title 26 of the United States Code and general criminal offenses contained in Title 18 of the United States Code). This means that in criminal tax cases, the United States Attorney can indict a defendant for multiple offenses over a span of a number of years. This can be disastrous. Since a criminal tax investigation or prosecution can involve elements of revenue offenses, if you are under investigation for a tax crime or believe that you are being investigated for a tax crime, it is imperative that you retain a criminal tax attorney that understands the defenses to both revenue and criminal offenses. Your criminal tax attorney must understand that a defense to a revenue offense may not be a defense to a criminal offense.
Below, please find a select list of revenue and criminal offenses. We have not fully analyzed these statutory offenses below, but instead list these offenses and their relationship to a basic charge of tax evasion.
Section 7201- Attempt to Evade and Defeat Tax
This Internal Revenue Code Section defines what is commonly known as “tax evasion” or “tax fraud.” It reads as follows:
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, or imprisoned not more than 5 years, or both, together with the cost of prosecution.
In order to be convicted of a Section 7201 crime, the government must prove that an attempt to evade and defeat tax was willful. For example, double sets of books, cash transactions, concealment, misleading conduct, false statements, and the like suggest willfulness.
Section 7203- willful Failure to File Return, Supple Information or Pay Tax
Any person required under this Internal Revenue Code section to pay any estimated tax or tax, or required by this title, or by regulations made under authority thereof, to make a return, keep any records, or supply any information, who willfully fails to pay such estimated tax or tax, make such return, keep such records, or supply such information, at the time or times required by law or regulations, shall, in addition to other penalties provided by law, be guilty of a misdemeanor and, upon conviction thereof, shall be fined not more than $25,000, or imprisoned not more than one year, or both, together with costs of prosecution.
Section 7206(1)-Filing a False and Fraudulent Return
Any person who-
Willfully makes and subscribes any return, statement, or other document, which contains or is verified by a written declaration that it is made under the penalties of perjury, and which he does not believe to be true and correct as to every material matter.
The presence or absence of a tax deficiency is “irrelevant” to a charge of filing a false tax return. All that is necessary is that the return be willfully false and the falsity be “material.”
Conspiracy 18 U.S.C. Section 371
An allegation of conspiracy can be used as a vehicle for extending a typical five or six year statute of limitation on prosecution for a tax crime. The offense of criminal conspiracy has two elements: 1) an agreement between two or more persons either: a) to commit an offense against the United States or b) to defraud the United States in any manner or for any purpose, and 2) an overt act committed by one or more of the conspirators to accomplish the objective of the conspiracy. In tax cases, the conspiracy offense charged can be an agreement to commit a substantive tax crime. All that needs to be established by the government is that two or more persons have agreed to commit a substantive tax offense or to defraud the United States government.
False Statements Made to an Agent of the United States 18 U.S.C. Section 1001
A false statement made to an Internal Revenue Service Agent is punishable with imprisonment up to five years and a $250,000 fine. The purpose of Section 1001 is “to protect the authorized function of government departments and agencies from the perversion which might result from” concealment of material facts and from false material representations.
If you are accused of violating one or more of the above revenue or criminal offenses, you must understand that there is a very real threat of criminal prosecution. If the United States Attorney chooses to prosecute you for a revenue or criminal offense, they will do so without compassion and carefully weigh the facts against you. If the United States Attorney succeeds in its criminal prosecution, there is a very real probability that they will seek to put you in prison. We understand these high stakes and will carefully investigate all the facts of your case to build your defense.