One goal many individuals have when it comes to taxes is to have as little tax liability as possible. There are a variety of legitimate techniques out there for trying to reduce one’s tax exposure. Pursuing these legitimate techniques is called tax avoidance, and it is perfectly legal.
However, there are lines the federal government sets when it comes to trying to lower one’s tax amount. There are a wide range of different types of tax conduct the federal government prohibits. When a taxpayer engages in these types of conduct in their attempts to lower their tax liability, their behavior is longer deemed legitimate and it can expose them to major consequences.
Now, if a taxpayer falls into prohibited tax conduct through an honest mistake, they generally won’t have criminal liability for their actions. However, the mistake can still have significant implications for them, as they still can face tax penalties and aggressive Internal Revenue Service collection methods.
Things are quite different though if the IRS suspects that an individual engaged in prohibited conduct with fraudulent intent, rather than by mistake. In such circumstances, in addition to tax consequences, a person could face criminal charges for tax fraud or tax evasion.
So, when a person is accused by the IRS of having crossed the line in connection to their tax conduct, whether the IRS is claiming the line-crossing was done by mistake or fraudulently can be a very big deal. Experienced tax attorneys can help individuals facing allegations of having strayed from the rules in their tax conduct understand what implications the specific allegations they are facing have and explain to them what courses of action are available for responding to the situation.
Source: FindLaw, “Avoiding Behavior the IRS Considers Criminal or Fraudulent,” Accessed March 11, 2016