What Actions Could Lead to Tax Evasion Charges in Illinois?

Illinois white collar crime defense lawyer

No one likes paying taxes. You see money being siphoned from your paycheck each month and dread receiving your tax return just to hear that you owe the government even more money. Unfortunately, there is no way to escape this aspect of “adulting.” Some individuals will use tax avoidance to try to lower their tax bills. This is not to be confused with the illegal practice of tax evasion. Avoidance is a legal method of structuring your finances and transactions to help you receive the largest tax benefits at the end of the year. While tax evasion may sound similar, it is actually an illegal attempt to cheat the system. In some circumstances, a person can unintentionally commit tax fraud as the victim of scammers.

Examples of Tax Evasion

Tax evasion is a type of tax fraud that could lead to someone spending time behind bars. Some people unintentionally commit tax fraud, but many offenders intentionally try to avoid their civic duties. Actions that could result in criminal charges include:

  1. Under-reporting: This is the most well-known way that companies or individuals avoid paying high taxes. By reporting a lower amount of income to the IRS, a person’s tax due amount can be reduced significantly. One common example of this practice is a business owner failing to disclose a day’s worth of profits.

  2. Personal expenses and business expenses: It is important to keep these two types of expenses separate to ensure that deductions are claimed correctly. Misreporting expenses is a common ploy used by scammers. By reporting an expensive vehicle, computer, or dinner as a business expense, a person may attempt to claim improper deductions and lower the amount of taxes they pay.

  3. Improper records: Some people will go so far as keeping two separate record books, one with the accurate information and the other for submitting to the IRS. If there are any discrepancies regarding business transactions or income, this can be seen as an illegal means to conceal accurate information.

What if I Am Not the Criminal?

Tax fraud is assumed to be intentional for those who appear to have inconsistencies in their reported income and tax returns. However, an individual can become a victim of tax fraud under the hands of scammers. Phishing emails are often a way for scammers to capture sensitive information. There have been cases in which businesses and individuals have sent emails under the persona of the IRS that contain malware when opened. These digital viruses can spread throughout a company's entire computer network, collecting financial information that can be used to fraudulently file tax returns. Illegitimate tax professionals can also cause harm to taxpayers by filing taxes in violation of the law. It is important to properly vet any financial planner whose services you might use to ensure that his or her credentials are legitimate.

Contact a Naperville Tax Evasion Defense Attorney

In many cases, tax evasion is committed by big businesses that are trying to reap huge profits, but it can also be committed by individuals who are struggling to stay afloat. However, there are also many cases in which the accused party is not at fault. At the Law Office of Glenn M. Sowa, LLC, we have more than 40 years of experience in all aspects of the criminal justice system, including white collar crime allegations. If you have been accused of committing tax fraud, contact our St. Charles, IL white collar crime defense lawyers at 630-232-1780 for a free consultation.

Sources:

https://www.bizfilings.com/toolkit/research-topics/managing-your-taxes/federal-taxes/tax-avoidance-is-legal-tax-evasion-is-criminal

https://www.business2community.com/cybersecurity/tax-fraud-scammers-ramp-up-their-tactics-in-2019-02155959