The Crime of Tax Evasion

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Jason B. Freeman

Jason B. Freeman

Managing Member


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).

What is Tax Evasion? Is It a Federal Crime?

Section 7201 of the tax code creates the federal crime of tax evasion. The crime of tax evasion has historically served as the principal tax revenue offense.

There are two potential offenses under section 7201: (A) the willful attempt to evade or defeat the assessment of a tax, and (B) the willful attempt to evade or defeat the payment of a tax.  United States v. Mal, 942 F. 2d 682, 687-88 (9th Cir. 1991) (if a defendant transfers assets to prevent the I.R.S. from determining his true tax liability, he has attempted to evade assessment; if he does so after a tax liability has become due and owing, he has attempted to evade payment).  Both are federal crimes.

The federal tax evasion statute provides as follows:


Any person who willfully attempts in any manner to evade or defeat any tax imposed by this title or the payment thereof shall, in addition to other penalties provided by law, be guilty of a felony and, upon conviction thereof, shall be fined not more than $100,000 ($500,000 in the case of a corporation), or imprisoned not more than 5 years, or both, together with the costs of prosecution.

Thus, in order to establish a violation of Section 7201, the government must prove the following elements:

  1. An affirmative act constituting an attempt to evade or defeat a tax or the payment thereof.
  2. An additional tax due and owing.
  3. Willfulness.

Notably, in order to establish the crime of tax evasion, the government must prove that a defendant engaged in some affirmative conduct that was designed to mislead the IRS or conceal tax liability or assets.  A common method of evading or defeating an assessment of a tax is the intentional filing of a false tax return.   A false tax return that understates tax liability–either by omitting income or claiming improper deductions–may serve as a method of attempting to evade or defeat the assessment of tax.

However, a mere failure to file a return, standing alone, generally is not sufficient to establish an attempt to evade taxes.  See Spies v. United States, 317 U.S. 492, 499 (1943); United States v. Hoskins, 654 F.3d 1086, 1091 (10th Cir. 2011) (“To be liable under § 7201, a defendant must do more than passively fail to file a tax return”); United States v. Nelson, 791 F.2d 336, 338 (5th Cir. 1986).

What is the Evasion of Assessment?

Filing a false tax return that omits income or claims improper deductions is the most common form of the evasion of the assessment of a tax. Evasion of assessment occurs when a taxpayer attempts to keep the government (more specifically, the IRS) from discerning their true tax liability. Tax liability is the amount of money an individual, corporation, or other entity to a taxing authority, such as the IRS.

Individuals who engage in evasion of assessment attempt to avoid their responsibility of paying their tax debt. Evading assessment is a crime under Section 7201 in the under the Internal Revenue Code (IRC). If you were to evade assessment, you are subject to penalty.

What is the Evasion of Payment?

The crime of willfully attempting to evade or defeat the payment of a tax typically occurs after it is established that a tax is due. Generally, the tax is established by the taxpayer reporting the amount of the tax or by the IRS assessing the amount of the tax at issue. Evasion of payment often involves an affirmative act to conceal money or assets that may be available to pay the tax.   However, “[m]erely failing to pay assessed taxes, without more, . . . does not constitute evasion of payment.” United States v. McGill, 964 F.2d 222, 231 (3d Cir. 1992).

What is the Evasion of Another Person’s or Entity’s Tax?

The crime of tax evasion is worded very broadly as an attempt “in any manner to evade or defeat any tax imposed by [Title 26] or payment thereof.” The government takes the position that this statute allows for the prosecution of one person for assisting with the evasion of another person’s tax liability.

How Do You Know When You Need a Tax Attorney?

Tax law can be quite complicated if you have little to no experience in that world. There are a lot of moving parts that always come into play when dealing with tax law. While everyone is liable for their own tax debt, many people attempt to avoid paying this amount in various ways.

Whether they attempt to evade assessment or try to avoid paying their debt entirely, they can and will be held responsible. Tax evasion is a federal crime, which means it is a serious offense. If you were to evade paying your taxes in any way, you will be subject to heavy penalties. If your tax matter is likely headed to court or you would like your case reviewed to clear yourself of misdeed, contact the tax attorneys at Freeman Law and let us help.


White Collar Defense Attorneys

Freeman Law represents companies, executives, and individuals in regulatory and white-collar government investigations and prosecutions. We employ a proactive approach to defend vigorously and strategically position our clients. White-collar matters often involve parallel regulatory and civil proceedings. Freeman Law can navigate the complexities and collateral consequences of multiple proceedings. And when it comes to the court of public opinion, we employ ethical and strategic tactics to manage publicity. Schedule a consultation or call (214) 984-3000 to discuss your allegations and investigations concerns.