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When Do You Need a Tax Evasion Attorney?

If you’re asking if you need a tax evasion attorney, you probably do.

Why do you always need a tax evasion attorney?

Tax evasion is a crime. If you’re convicted of tax evasion, you will have a criminal record that could affect your future employment. You can also face large fines and possible jail time.

Depending on the amount you owed, tax evasion can even be a felony.

Criminal consequences can extend beyond income taxes such as failing to file Form 8300 for large cash transactions, not filing an FBAR, or not paying payroll taxes.

Only a lawyer can represent you in a criminal case. CPAs and Enrolled Agents can help you fix tax problems, but a criminal charge is more than a tax problem.

One important thing to know is that the IRS can force a CPA or Enrolled Agent to repeat what you told them about tax fraud. With an attorney, you have attorney-client privilege, and the IRS doesn’t get to know what you told your lawyer.

What should you do if the IRS is looking at tax returns from a long time ago?

If the IRS is looking at things from more than three years ago, they might suspect tax fraud even if they haven’t told you. It’s time to lawyer up.

The IRS usually only has three years to catch taxes you should have paid. There is no limit in cases of tax evasion or tax fraud. There is a six-year limit in cases where you substantially understated your income.

Even if you think you “only” substantially understated your income and didn’t commit tax evasion, you still probably want a lawyer. A substantial understatement isn’t a crime, but it has a large penalty of 20% of the tax you owed in addition to the usual penalties and interest.

What does the government have to prove to convict you of tax evasion?

There are three elements to a tax evasion charge:

  • You committed an act to avoid paying taxes
  • You owed additional tax as a result
  • Your actions were willful (e.g., not a mistake)

Now, you might be thinking you don’t need a lawyer because you only made a mistake. The problem is at this point, you can still be facing a criminal charge.

If you make a big enough mess out of your tax return, the IRS might take that as evidence of an intentional action to evade taxes. There’s a chance that a jury might believe them.

You also don’t want to try to explain yourself to the IRS on your own. If they’ve already decided you’ve committed tax evasion, they’ll be looking for ways to use your words against you.

Even if you’re innocent, talk to a lawyer.

What if someone falsely reported that I was evading taxes?

You might have a former employee, competitor, ex-wife, or anyone else file a false report of tax evasion to the IRS. If the IRS contacts you, they have some evidence consistent with tax evasion.

Even if you think your taxes are 100% accurate, talk to a lawyer. Don’t take chances on criminal charges.

Once you get cleared, you can look into taking legal action against the person who falsely accused you.