What is Tax Evasion?

Tax evasion is the intentional and fraudulent underpayment or non-payment of taxes. It is paying less than the legally due amount by using illegal methods. Some of the common ways this crime is committed include:

  • Not reporting all income earned
  • Not filing a tax return
  • Lying or making false statements on a return
  • Claiming to be a resident of a different state in order to avoid paying taxes in California

Penalties for Tax Evasion

Tax evasion is considered a very serious crime in California and the penalties can be severe. A conviction for an individual is punishable to up to one year in county jail or state prison as well as a fine up to $20,00 but no more than $100,000. For corporations the fine can be up to $500,000.
Restitution is a very common penalty, meaning that the person charged with this crime must repay all the money that they failed to pay to the federal or state governments.

Legal Defenses for Tax Evasion

When charged with committing this crime it’s important to hire an experienced attorney. In order to be charged with tax evasion the prosecution must prove the following:

  • You made or verified a tax return or statement provided to the Franchise Tax Board, Board of Equalization, or Employment Development Department.
  • The tax return or statement was false or fraudulent.
  • When you supplied the information, you knew that the information was false or fraudulent.
  • You knowingly and intentionally violated a legal duty and intended to unlawfully evade paying a tax.

If all of these things can’t be proved then you can’t be charged with tax evasion.

Legal Defenses for Tax Evasion

The most common legal defense for this crime is not knowing that you were committing tax evasion. In order for this defense to be valid, certain factors of the defendant are relevant including:

  • Current conduct
  • Record of compliance with tax laws, and
  • Level of knowledge of taxes.

Another common defense is that the defendant relied on the advice of a professional but was mislead. There has to be proof that he or she relied on this advice.

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