Tax Fraud vs Tax Evasion
When it comes to taxes, mistakes can happen. However, not all mistakes are made equal, and it’s important to understand Tax Fraud vs Tax Evasion to know when those errors cross the legal line. You may have heard these terms used interchangeably, but they represent different types of offenses with varying degrees of severity. Below, we explain the difference between tax fraud and tax evasion and clarify some confusion surrounding these terms.
What Is Tax Fraud?
Tax fraud involves intentionally providing false information on tax returns to reduce tax payments. It’s an intentional act of deception aimed at avoiding paying the full amount of taxes you owe to the government. Some common examples of tax fraud include:
- Identity theft—stealing someone else’s identity to file fraudulent tax returns and claim refunds;
- False deductions and credits—claiming deductions or credits not supported by legitimate expenses or income;
- Perjury—lying under oath during a tax audit or investigation; or
- Bribery—offering bribes to tax officials to influence audits or investigations.
The IRS defines tax fraud as any willful attempt to evade tax obligations, which can lead to severe penalties, including fines, interest, and even imprisonment. Tax fraud often involves deliberately deceiving tax authorities, and proving intent is key to building a case. Making a mistake on your tax return can lead to penalties, but it’s not considered fraud unless you intentionally misled the IRS.
What’s the Difference Between Tax Fraud and Negligence?
Negligence involves failing to take reasonable care in preparing your tax return, while tax fraud is an intentional act of deception. While both lead to penalties, typically, negligence charges are less severe than fraud.
What Is the Difference Between Tax Evasion and Tax Fraud?
Tax evasion is a broader term for illegal actions to avoid paying taxes. While tax fraud is a form of tax evasion, not all tax evasion constitutes fraud. Evasion can include more subtle acts like:
- Hiding income—failing to report all income sources, including wages, investment gains, and self-employment earnings;
- Falsifying records—creating or altering documents to support false deductions or expenses;
- Offshore accounts—using foreign bank accounts to hide income and assets from tax authorities; or
- Cash transactions—conducting business transactions in cash to avoid leaving a paper trail.
Distinguishing tax evasion from tax fraud depends on the extent of the intentional deception involved. Although both are unlawful, evasion may not be as openly deceitful as fraud.
Is Tax Evasion a Criminal Offense?
Yes, tax evasion is a criminal offense that can result in both civil and criminal penalties. These penalties can include fines and imprisonment, depending on the extent of the evasion.
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Tax Fraud vs Tax Evasion : Why Does Intent Matter?
Intent plays a crucial role in distinguishing between tax evasion and tax fraud. Tax fraud requires intent to deceive, while tax evasion can sometimes occur without overtly fraudulent behavior. For example, suppose someone unintentionally underreports their income due to an accounting error. In that case, they may face penalties for tax evasion but not fraud if there’s no intent to deceive the IRS.
However, if someone knowingly hides income or falsifies records, they’re likely committing tax fraud. The IRS diligently investigates discrepancies in tax returns, but it will look for evidence of willful wrongdoing before pursuing fraud charges.
What Are the Penalties for Tax Fraud vs Tax Evasion?
While both tax fraud vs tax evasion lead to severe consequences, the penalties vary based on the nature of the offense.
Tax Fraud Penalties
In tax fraud cases, the IRS can levy fines up to 75% of the unpaid taxes, in addition to interest and the potential for criminal prosecution. In extreme cases, individuals convicted of tax fraud can face prison sentences of up to five years. Civil penalties may also apply, making the offender’s overall cost of tax fraud astronomical.
Tax Evasion Penalties
While tax evasion also carries serious consequences, the penalties can vary based on the severity of the infraction. For individuals, fines for tax evasion usually range up to $100,000, and severe cases may result in imprisonment for up to five years. Even if evasion doesn’t rise to the level of fraud, the financial repercussions can still be crippling.
What Is the Statute of Limitations for Tax Evasion vs Tax Fraud?
Tax fraud vs tax evasion have a statute of limitations of six years from the return’s filing date.
About Smith & Holder, PLLC
Smith & Holder, PLLC is a recognized trial and appellate law firm. Our attorneys have extensive experience in various criminal cases, including white-collar crimes like tax evasion and fraud. We are dedicated to delivering top-tier legal guidance representation to our clients.
Resources:
- The Difference between Tax Avoidance and Tax Evasion. Internal Revenue Service (IRS) website, link
- Criminal Tax Manual. US Justice Department (2024), link
- Tax Evasion. Cornell Law School – Legal Information Institute (2024), link
- Tax avoidance is legal; tax evasion is criminal. Wolters Kluwer (2024), link
- What Is Tax Fraud? Definition, Criteria, vs Tax Avoidance. Investopedia (2024), link
How to Get Out of Forgery Charges
Even though forgery is a non-violent offense, it still carries significant criminal penalties and collateral consequences. If you get convicted of forgery, jail time is a serious possibility. A forgery conviction can also impact your ability to secure future employment, especially in industries like finance or banking, where honesty and integrity are necessary traits.
State and federal prosecutors dedicate extensive resources to forgery investigations, leaving the accused at a severe disadvantage. A knowledgeable forgery lawyer can level the playing field by preparing a strategy to defend your rights. Contact an attorney at Smith & Holder, PLLC, to schedule an appointment.
What Is Forgery?
In Mississippi, a person commits credit card forgery when they falsely make, alter, or emboss a card purporting to be a credit card with intent to defraud a purported cardholder, issuer, or person or organization providing money, goods, property, services, or anything else of value.
An example of credit card forgery is when an individual creates a fake credit card and uses it to pay for something of value.
Mississippi outlines different types of forgery based on the document or information falsely represented.
For example, an individual who makes a false entry or falsely alters any entry made in any book of accounts kept in the office of the auditor of public accounts, the office of the treasurer of this state, the office of any county treasurer, or any other public office, by which any demand or obligation, claim, right, or interest, either against or in favor of the state, any county, city, town, village, or individual commits forgery. Forgery also occurs if someone makes a false entry or falsely alters account books kept by for-profit corporations.
Erasing, obliterating, or destroying a writing instrument that creates, increases, discharges, diminishes, or in any way affects any financial obligation, right, interest, or claim to property is also forgery.
The prosecutor must always prove the accused intended to defraud the victim.
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Federal Forgery Charges and Penalties
Federal law describes forgery as making, altering, using, or possessing a false document or material with the intent of committing fraud. It also outlines penalties for individuals who fraudulently make, forge, counterfeit, or alter any security of the United States.
A federal forgery conviction is punishable by up to 20 years in prison. The presiding judge uses the U.S. Sentencing Guidelines to help them determine an appropriate sentence. They will consider factors about the accused to make the determination, such as:
- The history and character of the accused;
- Effect of incarceration on their dependents; and
- They need to pay restitution.
The judge will also evaluate the sentences of similarly charged defendants to avoid unwarranted sentencing disparities.
Is Forgery a Felony?
Credit card forgery is a misdemeanor punishable by up to one year in jail and a fine of up to $1,000.
For other forgery charges, the penalties depend on the amount of value at issue. If the value involved is less than $1,000, the forgery is a misdemeanor punishable by up to six months in jail and a fine of up to $1,000. If the value involved is more than $1,000 but less than $5,000, the forgery is a felony and is punishable by up to five years in prison and a fine of up to $10,000. If the value involved is more than $5,000 and less than $25,000, it is punishable by up to 10 years in prison and a fine of up to $10,000. If the value involved is more than $25,000, the forgery is punishable by up to 20 years in prison and a fine of up to $10,000.
How to Get Out of Forgery Charges
To get out of forgery charges, it’s essential to challenge the prosecution’s case and create doubt about your guilt. Here are some effective defenses that an experienced forgery attorney might use:
- Lack of Intent to Defraud: Demonstrate that there was no intention to deceive or cause harm.
- Consent: Prove that you had permission to sign or alter the document in question.
- Authenticity: Show that the signature or instrument is genuine and not forged.
- Coercion: Argue that you were forced to forge the document under threat or duress.
An experienced fraud attorney can review your case and determine the most applicable defense strategy.
Contact a Forgery Attorney at Smith & Holder, PLLC, to Discuss Your Case
An embezzlement lawyer at Smith & Holder, PLLC, can help whether you are facing charges in state or federal court. An experienced lawyer can help your case by:
- Negotiating with the prosecutor to secure a positive result;
- Requesting copies of relevant police reports;
- Preparing witnesses for cross-examination by the prosecutor;
- Determining whether a legal defense applies to your case;
- Explaining your charges and
- Preparing your case for trial, if necessary.
Our founding attorney, Chris Smith, has experience as a prosecutor, giving him extensive courtroom expertise and insight into how the state proves its case. Contact a lawyer with Smith & Holder, PLLC, to discuss the facts of your forgery case.
When to Contact a Fraud Lawyer
Facing charges or being under suspicion for fraud can be a daunting and stressful experience. This situation demands swift and decisive action to navigate these complex offenses. In Mississippi and nationwide, understanding the role of a fraud lawyer is crucial for anyone facing these serious charges.
Understanding the Different Types of Fraud Charges
Fraud charges can span a broad spectrum, reflecting how deceit can be used for financial gain. These charges can significantly vary across different industries. Below are the major types of fraud that individuals and businesses may encounter.
- Identity Theft—Identity theft is the unauthorized use of someone else’s personal information for financial gain. It can range from credit card fraud to applying for loans under another person’s name.
- Insurance Fraud—Insurance fraud involves false claims or exaggerated damages to receive insurance payouts. It can be found in various sectors, from automotive insurance claims to health insurance billing.
- Securities Fraud—Securities fraud, also known as stock or investment fraud, encompasses various deceptive practices in the stock or commodities markets, including insider trading and Ponzi schemes.
- Bank Fraud—Banking fraud encompasses activities aimed at illegally obtaining money, assets, or other property owned or held by a financial institution;
- Tax Fraud—Tax fraud involves the evasion of taxes by individuals or corporations by not reporting income, reporting expenses not legally allowed, or not paying taxes owed; and
- Healthcare Fraud—Healthcare fraud involves filing dishonest healthcare claims to receive a profit. It can occur in various forms, including billing for services not rendered or upcoding for more expensive procedures than those actually performed.
Each type of fraud comes with its complexities and legal considerations. In Mississippi, as in other states, the legal system is equipped to address these diverse forms of deceit, employing a mix of state and federal laws to prosecute alleged offenders. Given the wide range of fraudulent activities, the experience of a specialized fraud attorney becomes indispensable.
Role of a Fraud Defense Lawyer
Fraud crimes encompass various activities, from identity theft to financial scams involving deception for personal or monetary gain. A specialized fraud defense lawyer offers several vital services.
Experience in Fraud Laws
Knowledge of Mississippi state and federal fraud laws, ensuring an informed and nuanced defense strategy.
Investigation and Evidence Analysis
Gathering and scrutinizing evidence, including digital data and financial records, to challenge the prosecution’s case.
Negotiation Skills
Working towards favorable plea bargains or case dismissals before the trial reaches court.
Trial Representation
Skillful representation in court, presenting strong defense arguments and cross-examining witnesses.
When to Contact a Fraud Defense Lawyer
Understanding the right time to seek legal assistance is crucial. There are key moments when it’s advisable to contact a lawyer.
Upon Suspicion or Accusation
Early intervention can significantly affect the case outcome. Prompt action is essential if you are suspected of or have been accused of fraud.
Before Speaking to Law Enforcement
It’s vital to consult a lawyer before discussing anything with law enforcement to avoid self-incrimination.
If You Receive a Summons or Subpoena
These documents indicate legal action is underway, necessitating professional guidance.
To Understand Your Rights
A lawyer can help you comprehend your legal rights and the potential consequences you face.
How to Find a Fraud Lawyer Near Me
A skilled fraud defense lawyer plays a key role in navigating the complexities of fraud cases by employing a multifaceted approach. This includes thoroughly analyzing the case to identify its strengths and weaknesses, thereby formulating a robust defense strategy. Furthermore, the lawyer protects your legal rights throughout the entire legal process. Their experience is particularly invaluable during negotiations, whether engaging with prosecutors or discussing terms with other parties involved. Moreover, in the courtroom, the presence of an experienced lawyer becomes indispensable, from handling pre-trial motions to representing you during the trial itself.
For those facing fraud charges or under suspicion in Mississippi, taking immediate, proactive steps is crucial. First and foremost, it’s imperative to exercise your right to remain silent until you secure legal representation. This helps avoid inadvertently compromising your case. Maintaining detailed records of all communications and documents related to your case is essential for building a strong defense. Lastly, seeking legal advice by contacting a Mississippi-based fraud defense lawyer to discuss your case and plan your next steps is a critical move toward navigating through the challenges ahead.
Speak with a Lawyer for Fraud Cases About the Charges You Face
If you are currently facing fraud charges, your future is on the line and it’s essential that you don’t place your trust in just any attorney. At the criminal defense firm of Smith & Holder, PLLC, our attorneys for fraud have extensive experience defending clients facing all types of white collar crimes, including fraud, embezzlement, identity theft and more. We command a deep knowledge of these complex financial crimes and what it takes to secure the best possible result–even in the toughest cases. To learn more, and to schedule a free consultation with an attorney today, give us a call or connect with us through our secure online contact form.
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Is Embezzlement a Felony?
Embezzlement is a felony charge when the property embezzled is worth at least $1,000. A felony conviction on your record can negatively impact your reputation and future opportunities. Additionally, a felony embezzlement conviction can result in several years in prison and thousands of dollars in fines. The best way to avoid a felony embezzlement conviction is by talking to an experienced attorney to defend your rights.
A member of our team can review the details of your case and advise you on what to do next. Contact Smith & Holder, PLLC, today to schedule a free initial consultation with an embezzlement attorney. Our team looks forward to working with you.
When Is Embezzlement a Felony?
Embezzlement occurs when someone fraudulently conceals, secretes, or converts to their own use any goods, rights of action, money, or other property they were entrusted with by virtue of their office, position, place, or employment.
Embezzlement is considered a felony when the property embezzled is worth more than $1,000. Otherwise, embezzlement is considered a misdemeanor.
Penalties for Felony Embezzlement
Embezzlement penalties increase as the value of the embezzled property increases. In Mississippi, embezzlement of property worth between $1,000 and $5,000 carries a maximum sentence of five years in prison and $5,000 fine. Embezzlement of property worth between $5,000 and $25,000 carries a maximum sentence of 10 years in prison and a $25,000 fine. Embezzling property valued at more than $25,000 carries a maximum sentence of 20 years in prison and a $25,000 fine.
Federal Embezzlement Charges
Federal law prohibits embezzlement. Embezzlement is defined as a person fraudulently taking property that was legally entrusted to them with the intent to deprive the rightful owner of its use. The difference between embezzlement and theft is that embezzled property is lawfully controlled by the accused until they misappropriate it for their own use. The elements the prosecution needs to prove an embezzlement charge are listed below:
- A trust or fiduciary relationship existed between the accused and the rightful owner of the property;
- The U.S. government owns or has an interest in the embezzled property;
- The accused took possession or care of the property by virtue of their employment;
- The accused fraudulently converted or appropriated the property for their own use; and
- They intended to deprive the rightful owner of the use of the property.
The intent to deprive the rightful owner permanently is not required. Therefore, someone can still face embezzlement charges if they return the property after the fact.
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Potential Embezzlement Sentence in a Federal Case
A federal embezzlement conviction is punishable by a fine of up to $10,000 and up to 10 years in prison. A federal embezzlement charge is a misdemeanor if the value of the embezzled property does not exceed $1,000.
An embezzlement conviction can also impact your overall trustworthiness. Embezzlement is considered a “crime of dishonesty”. Having a crime of dishonesty conviction on your record allows prosecutors to present unfavorable information about your prior conviction during future criminal proceedings. The prosecutor can use a prior embezzlement conviction to attack your credibility on the stand.
A felony conviction can create other hurdles when seeking a new job, applying for scholarships, or traveling out of the country. Reach out to an attorney to discuss ways to minimize these consequences.
Reducing Felony Embezzlement to a Misdemeanor
The primary factor that makes embezzlement a felony instead of a misdemeanor is the value of the embezzled property. In some cases, an attorney can present proof that the market value of the embezzled property is below $1,000 and your charge should be considered a misdemeanor.
We can also present a legal strategy to negate proof of an element of the embezzlement charge. Valid defenses to embezzlement include:
- You had permission to use the property as your own;
- The rightful owner abandoned the property before you took possession;
- There was a lack of intent to deprive the rightful owner of the property; or
- You had a good-faith belief that you were entitled to the property you appropriated.
The prosecutor bears the burden of proving every element of an embezzlement charge beyond a reasonable doubt. If we can demonstrate a reasonable doubt as to one or more elements, the prosecution may agree to reduce a felony embezzlement charge to a misdemeanor.
How Much Embezzlement Is a Felony? Contact a Lawyer Today to Find Out
An attorney at Smith & Holder, PLLC, can help whether you are facing embezzlement charges in state or federal court. Our attorneys are aggressive, strategic advocates who fight tirelessly to protect our clients from convictions. As a former prosecutor, Attorney Chris Smith knows the strategies prosecutors use to secure embezzlement convictions. Our team will thoroughly investigate the circumstances that led to your charges and determine the best strategy to fight the accusations.
Contact an attorney at Smith & Holder, PLLC, so we can start reviewing your case.
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How to Get Out of Embezzlement Charges
An embezzlement charge is a type of white-collar crime that refers to instances when someone takes property they were entrusted with and uses it for their gain. Embezzlement charges carry the potential for incarceration and hefty fines.
Additionally, an embezzlement conviction can affect your ability to secure a different job or stop you from qualifying for certain living arrangements. The best way to minimize the consequences of a criminal conviction is to talk to an embezzlement lawyer about your options. We can review the details of your case to determine if a legal defense applies to your charges. Contact an embezzlement attorney with Smith & Holder, PLLC, to discuss your charges.
What Is an Embezzlement Charge?
Embezzlement occurs when someone fraudulently appropriates or converts to their own use property or funds they received due to their employment position or virtue of their office. The critical element distinguishing embezzlement from a basic theft charge is that the accused in an embezzlement case lawfully accessed the property or funds at issue, but broke the law when they used such property or funds for their own benefit.
Consider that a department store employee takes the store’s cash deposit to the bank every night to place into the business’s bank account. One night, instead of depositing the funds into the store account, the employee deposits the money into their personal checking account. The employee commits embezzlement because they lawfully possessed the deposit as a result of their employment position before depositing it into their account.
Potential Defenses to Embezzlement Charges
To prevail at trial, the prosecutor must prove every element of an embezzlement charge beyond a reasonable doubt. Some defenses that can help disprove one or more elements of the offense include:
- Lack of intent to appropriate the property for personal use;
- Lack of control of the property you are accused of embezzling;
- You had a good-faith belief that you were entitled to the property you appropriated;
- Duress caused you to misappropriate the property; and
- Insufficient evidence.
A legal defense does not apply to every case. Our team of experienced embezzlement lawyers can review your case and determine whether a defense applies.
Embezzlement Sentence and Penalties
Penalties for embezzlement vary based on the value of the property or money the accused embezzled. Embezzling property worth less than $1,000 is considered a misdemeanor and carries the possibility of up to six months in jail and a fine of up to $1,000. Embezzlement of property worth more than $1,000 but more than $5,000 is considered a felony and carries the possibility of up to five years in prison and a fine of up to $5,000. Embezzlement of property worth more than $5,000 but more than $25,000 is considered a felony and carries the possibility of up to ten years in prison and a fine of up to $25,000. Embezzling property worth more than $25,000 is considered a felony and carries the possibility of up to twenty years in prison and a fine of up to $25,000.
As you can see, embezzlement penalties can inflict significant hardship on you and your loved ones. Talk to an experienced attorney to discuss alternative options.
Other Consequences of an Embezzlement Conviction
An embezzlement conviction can also impact your reputation and overall trustworthiness. Embezzlement is what is known as a “crime of dishonesty”. A crime of dishonesty conviction enables prosecutors to present unfavorable information about your prior conviction during future trials. So if you have a prior conviction for a crime of dishonesty and go to trial on a new charge in the future, the prosecutor can use that prior conviction to attack your credibility on the stand and make you look untrustworthy to the jury.
Any criminal conviction on your criminal record can reflect on you poorly. The best way to avoid a conviction is by talking to an embezzlement attorney, who can negotiate with the prosecutor about your case.
Contact a Lawyer to Discuss How to Get Out of Embezzlement Charges
An embezzlement conviction can lead to irreparable harm to your reputation and criminal penalties like jail time and fines. An embezzlement attorney at Smith & Holder, PLLC, can review the details of your case and determine whether a legal defense applies. Our team will demonstrate how the legal defense negates an element of the embezzlement charge and negotiate with the prosecutor to dismiss or reduce your charges.
Our attorneys are aggressive, strategic advocates who pursue every opportunity to protect our clients from a conviction. As a former prosecutor, Attorney Chris Smith has experience with embezzlement cases and knows what information the State uses to build their cases. He uses his insider knowledge to secure favorable results for his clients.
Contact an attorney at Smith & Holder, PLLC, to schedule a free initial consultation with a member of our team. We look forward to hearing from you.
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