Tax Evasion

The so-called Panama Papers are voluminous files of information from a law firm in Panama that engaged in helping foreign clients avoid or evade taxes with dubious or even illegal shelters. Their publication last spring had immediate and wide-ranging effects around the world, including a new U.S. role on verification of the identities of offshore […]

“I can resist everything except temptation,” quipped the flamboyant Victorian poet Oscar Wilde. To be sure, you may feel you have more ability to resist your particular temptations than Wilde had to resist his. But if you are a business owner who is tempted to dip into payroll taxes withheld from employees to cover cashflow […]

Let’s continue our discussion of how the sheer complexity of the tax code makes it difficult to stay in full compliance. As we noted in the first part of the post, it’s all too easy to make an innocent error or to be unaware of some specific requirement. This is where the concept of “willfulness” […]

A few weeks ago the world was introduced to one of the largest information leaks ever seen: over 11.5 million documents and 2.6 terabytes of information from the Panamanian law firm Mossack Fonseca went public. While the leak does not necessarily stamp all those involved with guilty convictions for tax evasion, money laundering, or any […]

Let’s continue our discussion of the disparity between the cumulative amount of tax that the IRS says taxpayers owe as a whole and the amount that the agency collects in practice. This difference or disparity is called the “tax gap.” In the first part of this two-part post, we noted that underreporting of income is […]

U.S. tax authorities began a stepped-up enforcement campaign on offshore account reporting requirements in 2008. It hasn’t really let up since. Indeed, with the passage of the Foreign Account Tax Compliance Act (FATCA), these requirements have become even more burdensome for U.S. taxpayers with foreign income or assets. The burden is such that an increasing […]

In a recent post, we discussed whether accounting errors might lead to criminal tax charges. Today, we take a closer look at the specific crime of tax evasion. The Internal Revenue Code at Section 7201 defines tax evasion as a willful act and elevates the criminal consequences to a felony. Yet how can willfulness be […]

Readers may have questions about when a tax mistake rises to the level of tax evasion or fraud. As a preliminary matter, it should be noted that even the Internal Revenue Service acknowledges the complexity of the tax code. By the agency’s own estimate, about 17 percent of taxpayers fail to comply with applicable tax […]

Today was the extended filing deadline for U.S. citizens who lived abroad on the regular tax due date for 2014 returns. You still have until the end of June to file your FBARs, FATCA reports and Statements of Special Foreign Financial Assets, as appropriate, however, which brings us back to those controversial foreign income reports. […]

A 42-year-old Connecticut woman pleaded guilty to tax evasion this week. Over the past six years, she had failed to pay income tax on more than half a million dollars. No, she did not forget to file her taxes, nor did she make a simple mathematical error on her federal tax returns. According to the […]