When it comes to tax crimes in New Haven, Connecticut, New York city or elsewhere, Tax Evasion is always considered the big kahuna of tax crimes. So what is "Tax Evasion"?
We handle civil IRS cases and criminal tax cases all over the United States, and therefore see a lot of what taxpayers do and don't do that later get them into trouble. One thing I do notice is the confusion about what "Tax Evasion" actually is, and that most practitioners do not realize there are two forms of tax evasion: Evasion of Liability and Evasion of Collection. More and more, the Evasion of Collection is being used to go after taxpayers, particularly when the government has noted that the taxpayer is structuring cash deposits. Structuring is one of those crimes that many people commit without even realizing it's a crime, and is now a significant focus of the government.
Evasion of a tax liability is where the taxpayer engages in an affirmative act for the purpose of attempting to evade or defeat the assessment of a tax, such as filing a false tax return. Here the liability is improperly understated. Evasion of collection is where a taxpayer's liability is correct but the taxpayer tajkes affirmative steps to frustrate collection of the tax, such as filing false Collection Information Statements, managing their affairs in cash so that the government cannot levy bank acocunts and collect, and hiding assets in other people's names and other entities. Interestingly its the "Evasion of Collection" crime that I am seeing crop up more and more, probably because of the government's focus on Structuring.
Financial instututions are required to file a Currency Transaction Report ("CTR") whenever its receives more than $10,000 in cash or cash equivalents. Structuring is the crime committed when a taxpayer structures his or her deposits in a way to avoid having the financial institution file the CTR. When taxpayers begin trying to dodge the IRS collection efforts, often they commit the crime of structuring, which is what the Department of Justice will use as its "affirmative" act to prove the Evasion of Collection charge.
It is critical that taxpayers and their practitioners understand what Structuring is and that it is not only a crime itself, but can be used by the government to bolster its tax evasion case. Moreover, by merely playing cat-and-mouse with the IRS Collection Division the taxpayer is arguably committing the crime of Tax Evasion.
If you or a client have any questions about tax crimes, including Tax Evasion or Structuring, please feel free to contact me at (203) 285-8545 or egreen@gs-lawfirm.com.
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