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Where exactly is the line for tax evasion?

If there is one thing that business owners across a wide spectrum of industries can agree on, it is that they all want to pay as little in taxes as legally possible. Reducing a business’ tax burden can leave more money available to invest in the business and to improve its bottom line.

However, some businesses may not have the same view of what is “legally possible” to reduce their tax obligations, and some actions may cross the line. The story of a New Jersey trucking company exemplifies this notion. 

The company’s owner recently pled guilty to three counts of tax evasion along with one count of bankruptcy fraud for his part in concealing a number of bank accounts while filing for bankruptcy protection in 2014. Federal prosecutors alleged that he claimed losses on the business in 2011, 2012 and 2014, all the while concealing income realized by the business in order to avoid paying taxes.

Additionally, the owner inflated his business expenses to create artificial losses for the business.

Indeed, business owners have a duty to use reasonable care in reporting income and must follow IRS rules and federal law in doing so, but they also must understand the current climate of tax litigation. Federal prosecutors have a wide degree of latitude in bringing criminal charges, and they are more likely to use the vague language included in some statutes to criminalize arguably legal behavior.

In these instances, an experienced white collar crime defense attorney can help protect the rights of the accused and avoid significant fines. 

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