Tax Evasion

What is Tax Evasion?

Tax evasion is the illegal and willful act of deliberately avoiding paying taxes owed to the government. This can include underreporting income, inflating deductions, hiding money or assets, or failing to file tax returns entirely. Unlike tax avoidance, which uses legal methods to reduce tax liability, tax evasion involves fraudulent conduct with the intent to deceive tax authorities and avoid lawful tax obligations. It is a criminal offense subject to prosecution.

Georgia and Federal Laws on Tax Evasion

Federal law, under Internal Revenue Code Section 7201, makes it a felony to willfully attempt to evade or defeat the assessment or payment of any federal tax. This includes actions like falsifying tax returns or concealing income. Penalties include felony charges with fines up to $100,000 for individuals ($500,000 for corporations), imprisonment for up to five years, or both. Additionally, convicted persons may face restitution and costs of prosecution.

Georgia state law also prohibits tax evasion under various tax codes, imposing penalties on anyone who intentionally evades paying state taxes. State-level charges may accompany federal prosecution depending on circumstances and the taxes involved. Penalties on the state level can consist of fines, imprisonment, or both, reflecting the severity of financial crimes.

Penalties and Sentences for Tax Evasion

Tax evasion is treated as a serious offense with stiff penalties designed to deter fraudulent conduct. Convictions can result in:

• Imprisonment for up to five years under federal law.
• Substantial fines commensurate with the evaded tax amount and statutory limits.
• Orders for restitution and payment of back taxes.
• Additional legal repercussions affecting personal and business records.

Because tax evasion cases often require proof of intent and complex financial evidence, the guidance and defense of an experienced criminal lawyer are critical to ensure the best possible outcome.