Can You Go to Jail for Tax Evasion?  

You can go to jail for serious tax fraud or tax evasion. However, as with other felony offenses, prosecutors will need to prove intent. An experienced tax evasion lawyer will use all available tools and processes to challenge any allegations of intentional tax fraud. 

At Ayar Law in Farmington Hills, Michigan, we represent taxpayers in civil and criminal tax evasion cases. You will have a significantly better opportunity to avoid serious charges and jail time for tax fraud when you retain the services of lawyers with in-depth knowledge of tax evasion investigation rights. They will also understand the level and scope of tax fraud that prosecutors need to prove before they seek a prison sentence. 

Is there a difference between tax evasion and tax avoidance? 

The differences between tax evasion vs. tax avoidance can be subtle. However, the critical distinction is that tax avoidance is a legitimate approach to minimizing your tax payment burden, whereas tax evasion can lead to criminal charges.   

Tax avoidance might include: 

  • Deducting business expenses from income that your personal business generates 
  • Contributing pre-tax revenue to a retirement plan or health savings account
  • Donating to charities 
  • Claiming child tax credits.

On the other hand, tax avoidance reflects a purposeful effort to hide revenues, such as: 

  • Maintaining two sets of accounting books for your business 
  • Overstating business deductions 
  • Transferring assets or income away from your personal or business accounts 
  • Underreporting income or omitting revenue from tax filings

You should always consult with an experienced tax lawyer if you have any questions about whether something qualifies as a legitimate tax avoidance strategy before implementing it. 

How does the IRS prove tax evasion? 

The IRS’s first step toward proving tax evasion is demonstrating that you or your business have an unpaid tax liability. The IRS might do this, for example, by comparing income that you claim with third-party reports of deposits or payments to you or your business.

The IRS will then determine if you took steps to evade your tax liability and if those steps were intentional instead of merely negligent or accidental. To show intent, the IRS will make reasonable inferences based on your representations regarding material facts and documents you filed. If you are facing allegations of criminal tax evasion, you should immediately retain a tax evasion defense attorney who can push back against the IRS’s inferential conclusions. 

Call Ayar Law for Aggressive Defense Against Charges of Tax Evasion 

The tax evasion defense lawyers at Ayar Law in Farmington Hills, Michigan, will aggressively defend you against charges of criminal tax evasion that the IRS may raise against you. We also advise clients on how to structure their tax liabilities to avoid those charges. 

Please call our offices for a free, confidential consultation about your potential criminal liability and how to prevent that liability from leading to jail time for tax evasion.