The taxes people pay to the Federal Government and the State of Alabama finance everything from road and schools, to post offices and police officers. To maintain these services, governments collect taxes on things such as income, property, and the purchase of certain items.
While the available credits and deductions are legal ways to lower a person’s overall tax bill, there are other, illegal ways that people attempt to avoid paying taxes. These illegal methods are crimes against both the Federal Government and the State of Alabama.
Depending upon which entity is entitled to the payment, either may prosecute the crime. A Birmingham tax evasion lawyer can represent individuals accused of tax evasion to plead their case in court and fight back against the allegations. Call an experienced attorney today for a consultation.
Laws Regarding Tax EvasionThe act of tax evasion is both a federal and state crime. The party that will prosecute the claim depends upon which entity has a claim to the funds. Individuals do not pay any tax to both Alabama and the Federal Government, so no person can face simultaneous charges.
The language of the statutes making tax evasion a crime is identical in both Alabama and U.S. Codes. According to 26 U.S.C. §7201 and Alabama Code §40-29-110, it is illegal for any person to willfully defeat or evade any tax or payment thereof.
This means it is equally illegal to alter one’s finances to avoid the appearance of the need to pay a tax as it is to simply not pay a tax once it is levied by the government.
The statutes further state these offenses may result in a fine of up to $100,000 in the case of a person or $500,000 in the case of a corporation. In addition, a guilty party can be imprisoned for up to five years. The individual must also pay all the taxes they avoided.
Defending Against Tax Evasion AccusationsAs with any other criminal accusation, the burden is on the prosecution to prove the charge beyond a reasonable doubt. For a tax evasion case, this means proving the individual acted in a way to avoid the tax, and willfully did so.
The idea of willfulness is a legal concept that means a person committed an act with the intent it would have a specific effect. When applied to tax evasion, this means an individual took an action with the intent that it would result in non-payment.
For example, a person may face accusations of underreporting revenue taken from customers to not pay taxes on it. On the other hand, this underreporting of income may be the result of employee embezzlement or an accounting error.
In these situations, a Birmingham tax evasion lawyer may raise the defense that the defendant did not intend to avoid paying a tax. If this is true, accusations may be dropped with an agreement that the individual will pay all outstanding taxes.
How a Birmingham Tax Evasion Attorney Can HelpAccusations of tax evasion, whether made by the Federal Government or the State of Alabama, are extremely serious. If you face charges of willfully avoiding or refusing to pay taxes, they can face fines of up to $100,000 and a prison sentence of up to five years. The stakes are high for both your personal liberty and the future of your business.
A Birmingham tax evasion attorney is here to help. A lawyer can work with individuals to analyze your case, form an effective defense, and present their case in court. Contact a lawyer today to learn how they can help you.