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What is the difference between tax fraud and tax evasion?

On Behalf of | Feb 22, 2023 | Government Fraud

Every year Americans file personal and business income taxes with the Internal Revenue Service (IRS). The process is often time-consuming and complicated and often results in large sums of money due to the IRS.

Whether people do not have the money to pay the bill or do not want to pay taxes, it is illegal to avoid paying taxes. Depending on the circumstances, the crime may be tax evasion or other types of tax fraud.

Tax fraud includes many different crimes

Fraud is the general term used to describe the criminal activities that lead to the avoidance of paying taxes. Some different types of tax fraud are:

  • Intentionally not paying taxes due
  • Not disclosing taxable income
  • Failing to report employee tax contributions
  • Creating false documents to support fraudulent returns

Since anyone can make honest mistakes when filing taxes, the IRS must prove intent when charging offenders with fraud.

Tax evasion is a common type of tax fraud

Tax evasion is the purposefully misrepresenting information to decrease or eliminate taxes. The IRS allows special circumstances and loopholes for individuals and businesses to lower their tax liability legally. However, sometimes people take this too far and claim reductions they are ineligible for. Tax evasion also includes underreporting income and overreporting expenses to decrease tax burdens.

Taxes can be expensive, and you may be charged with a crime if you have intentionally committed tax evasion or other tax fraud to avoid paying them. Consider consulting an attorney from our office to help you through this process.


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