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What does tax evasion consist of?

On Behalf of | Apr 11, 2024 | White Collar Crimes |

Every year, Michigan residents are assessed taxes at both the state and federal level. The tax code is complex, and it can sometimes be difficult to know exactly what you may owe and what deductions you are able to take.

Making a mistake on your taxes isn’t a crime, but tax evasion is. Like many white-collar crimes, tax evasion cases can be complicated and obscure, and the lines between what’s legal and illegal can sometimes blur. Therefore, it’s important to understand the details of tax evasion.

The basics of tax evasion

At its core, the crime of tax evasion consists of the willful attempt to not pay the government taxes you owe. The “willful” part of the definition is critical. In order to be guilty of tax evasion, the attempt to evade taxes must be deliberate.

However, there’s a crucial caveat to consider: Simply believing in good faith that you’re complying with tax laws doesn’t provide a legal defense. This nuance makes navigating tax evasion issues complex. An honest mistake on your tax return doesn’t automatically amount to tax evasion. Yet, deliberately taking steps to underpay taxes is a criminal act, and claiming ignorance won’t serve as a viable defense if you’re charged.

The elements the state must prove in a tax evasion case

There are three elements the state must demonstrate to win a tax evasion case. They are:

  • Demonstrate that some dollar figure is owed in taxes
  • Show that you made some attempt to evade either the payment or assessment of that tax
  • Prove that your action was willful and that you voluntarily and intentionally avoided your legal duty

If the state is unable to satisfy all three of these conditions, they’re unlikely to successfully score a conviction. Even failing to meet the burden of proof is enough to merit an exoneration.

Tax evasion can be complex , especially given the density of the tax code. Understanding what goes into a tax evasion charge can help you remain on the right side of the law while fulfilling your tax duties.