Explaining the Difference
With tax season looking a little different this year, it is common to get your head caught up in thinking that you may have accidentally filed something incorrectly. On the other hand, you may be looking to get a break on the amount you are paying.
If you have ever wondered where the line is drawn regarding tax avoidance and tax evasion, it is important first to understand the main difference between the two.
- Tax Evasion is when one uses illegal means to avoid reporting income. For example, a small business may be charged for not reporting cash proceedings, or a millionaire may be charged for using a secret offshore account.
- Tax Avoidance is when you apply legal means to minimize tax liability. This can happen when claiming deductions or credits or investing in things with tax benefits like bonds.
However, the biggest difference between the two is that while tax evasion is illegal, tax avoidance is not.
What Does Tax Evasion Look Like?
Tax evasion can come in several different media, with different levels of associated penalty depending on the severity of the action. Some of the things that can be considered tax evasion include:
- Underreporting your income or falsifying records
- Overstating deductions
- Generally underpaying taxes
- Hiding interest in offshore accounts
How Nick Lotito & Seth Kirschenbaum Can Help
We represent CEOs, business owners, licensed professionals, and CFOs caught up in tax charges and all criminal tax prosecutions. We work so that every individual gets freedom, regardless of the tax bracket you are in.
If you have either explicitly or implicitly committed tax evasion of any kind, it is important to have an experienced attorney on your side to make sure your rights are protected. Call (404) 471-3177 to schedule a free consultation with our Atlanta criminal defense attorneys.