Tax Crimes and the Statute of Limitations

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Jason B. Freeman

Jason B. Freeman

Managing Member

214.984.3410
jason@freemanlaw.com

Mr. Freeman is the founding member of Freeman Law, PLLC. He is a dual-credentialed attorney-CPA, author, law professor, and trial attorney.

Mr. Freeman has been named by Chambers & Partners as among the leading tax and litigation attorneys in the United States and to U.S. News and World Report’s Best Lawyers in America list. He is a former recipient of the American Bar Association’s “On the Rise – Top 40 Young Lawyers” in America award. Mr. Freeman was named the “Leading Tax Controversy Litigation Attorney of the Year” for the State of Texas for 2019 and 2020 by AI.

Mr. Freeman has been recognized multiple times by D Magazine , a D Magazine Partner service, as one of the Best Lawyers in Dallas, and as a Super Lawyer by Super Lawyers, a Thomson Reuters service. He has previously been recognized by Super Lawyers as a Top 100 Up-And-Coming Attorney in Texas.

Mr. Freeman currently serves as the chairman of the Texas Society of CPAs (TXCPA). He is a former chairman of the Dallas Society of CPAs (TXCPA-Dallas). Mr. Freeman also served multiple terms as the President of the North Texas chapter of the American Academy of Attorney-CPAs. He has been previously recognized as the Young CPA of the Year in the State of Texas (an award given to only one CPA in the state of Texas under 40).

The statute of limitations for most criminal tax offenses is governed by 26 U.S.C. § 6531.  Section 6531 provides as follows:

No person shall be prosecuted, tried, or punished for any of the various offenses arising under the internal revenue laws unless the indictment is found or the information instituted within 3 years next after the commission of the offense, except that the period of limitations shall be 6 years –

(1) for offenses involving the defrauding or attempting to defraud the United States or any agency thereof, whether by conspiracy or not, and in any manner;

(2) for the offense of willfully attempting in any manner to evade or defeat any tax or the payment thereof;

(3) for the offense of willfully aiding or assisting in, or procuring, counseling, or advising, the preparation or presentation under, or in connection with any matter arising under, the internal revenue laws, of a false or fraudulent return, affidavit, claim, or document (whether or not such falsity or fraud is with the knowledge or consent of the person authorized or required to present such return, affidavit, claim, or document);

(4) for the offense of willfully failing to pay any tax, or make any return (other than a return required under authority of part III of subchapter A of chapter 61) at the time or times required by law or regulations;

(5) for offenses described in sections 7206(1) and 7207 (relating to false statements and fraudulent documents);

(6) for the offense described in section 7212(a) (relating to intimidation of officers and employees of the United States);

(7) for offenses described in section 7214(a) committed by officers and employees of the United States; and

(8) for offenses arising under section 371 of Title 18 of the United States Code, where the object of the conspiracy is to attempt in any manner to evade or defeat any tax or the payment thereof.

26 U.S.C. § 6531.

The structure of the statute sets forth a general three-year statute of limitations for Title 26 offenses. However, that general rule is largely swallowed up by the “exception,” which provides that a six-year statute of limitations applies to a number of listed tax offenses.  Moreover, while the statute of limitations generally begins to run at the point in time that an offense is completed, Toussie v. United States, 397 U.S. 112, 115 (1970), that does not mean that all tax offenses are considered completed for statute of limitations purposes upon the filing of a tax return.  E.g., United States v. Thompson, 518 F.3d 832, 856-57 (10th Cir. 2008), cert. denied, 129 S. Ct. 487 (2008); see also United States v. Goodyear, 649 F.2d 226, 228 (4th Cir. 1981) (crime considered complete at time of false statement to IRS agent, not when false return is filed); United States v. Irby, 703 F.3d 280 (5th Cir. 2012) (limitations period began from affirmative acts after filing return).

Below is a chart setting forth the statute of limitations that applies to common tax crime charges:

Description of Offense Code Section Statute of Limitations Code Section
Tax Evasion 26 U.S.C. § 7201 6 years 26 U.S.C. § 6531(2)
Failure to Collect, Account For or Pay Over 26 U.S.C. § 7202 6 years 26 U.S.C. § 6531(4)
Failure to Pay Tax 26 U.S.C. § 7203 6 years 26 U.S.C. § 6531(4)
Failure to File a Return 26 U.S.C. § 7203 6 years 26 U.S.C. § 6531(4)
Failure to Keep Records 26 U.S.C. § 7203 3 years 26 U.S.C. § 6531
Failure to Supply Information 26 U.S.C. § 7203 3 years 26 U.S.C. § 6531
Supplying False Withholding Exemption Certificate 26 U.S.C. § 7205 3 years 26 U.S.C. § 6531
Filing a False Tax Return 26 U.S.C. § 7206(1) 6 years 26 U.S.C. § 6531(5)
Aid or Assist in Preparation or Presentation of False Tax Return 26 U.S.C. § 7206(2) 6 years   U.S.C. § 6531(3)
Deliver or Disclose False Document 26 U.S.C. § 7207 6 years 26 U.S.C. § 6531(5)
Attempt to Interfere With Administration of Internal Revenue Laws 26 U.S.C. § 7212(a) 6 years 26 U.S.C. § 6531(6)
Conspiracy to Commit Tax Evasion 18 U.S.C. § 371 6 years 26 U.S.C. § 6531(8)
Conspiracy to Defraud the Internal Revenue Service 18 U.S.C. § 371 6 years 26 U.S.C. § 6531(1)
False Claim for Refund 18 U.S.C. § 286/287 5 years 18 U.S.C. § 3282
False Statement 18 U.S.C. § 1001 5 years 18 U.S.C. § 3282

(Table listings from DOJ Tax Manual.)

 

For information on civil tax statutes of limitations in federal tax cases, see Statutes of Limitations in Federal Tax Cases.

Representation in Tax Audits & Appeals

Need assistance in managing the audit process? Freeman Law’s team of attorneys and dual-credentialed attorney-CPAs regularly represents taxpayers before the IRS and Texas Comptroller. Our team also provides tax return-related representations and helps taxpayers navigate state tax laws. Our Firm offers value-driven services and provides practical solutions to complex issues. Schedule a consultation or call (214) 984-3410 to discuss our tax representation services.

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