In a previous article about making false statements on your tax return, we discussed the basics of the tax evasion statute and explained the three elements of a tax crime. In particular, we looked into the first element of the tax evasion statute: the existence of an additional tax due and owing. Now, we explain in detail the remaining two elements of the tax evasion statute: an attempt by the taxpayer to evade or defeat the tax; and willfulness on the part of the taxpayer.

Element 2: An Attempt by the Taxpayer to Evade or Defeat the Tax

The second element of the income tax evasion statute found at IRC § 7201 requires an attempt by the taxpayer to evade or defeat the tax. The statute also specifically states that the “attempt” required under the law can be made in “any manner”. The “attempt” language of IRC § 7201 distinguishes the tax evasion statute from a mere failure-to-file offense. While the failure-to-file penalty also involves non-payment of tax, it does not have the same requirement as tax evasion of an attempt by the taxpayer to not pay the tax. The Supreme Court has explained that a mere failure-to-file, without more, cannot form the basis for the charge of tax evasion. Instead, the failure-to-file must be coupled with some affirmative actions or conduct to be considered an “attempt” under the meaning of the tax evasion statute.

What Qualifies as an Attempt Under the Tax Evasion Statute?

As explained above, tax evasion requires an “attempt” which may be made “in any manner.” In Spies v. United States, the Supreme Court listed a number of different activities which may rise to the level of a willful attempt under the tax evasion statute:

  • Keeping a double set of books;
  • Making false entries or alterations to the books;
  • Making false invoices or documents;
  • Destroying books or records;
  • Concealing assets or covering up sources of income;
  • Handling one’s affairs to avoid the making of records usual in transactions of the kind; and
  • “Conduct the likely effect of which would be to mislead or conceal.”

In past tax evasion cases, courts have found the following fact patterns to rise to the level of an attempt for the purposes of the criminal charge: Where a taxpayer failed to file a return, but filed a W-4 form with his employer, was considered to be an affirmative attempt in violation of the tax evasion statute.

The attempt to evade taxes does not have to occur before the taxpayer files his or her tax return. Instead, the conduct forming the basis for the “attempt” requirement of the tax evasion statute may take place after the filing takes place. Granted, the usual timing of a tax evasion attempt is before the filing of the tax return. For this reason, the most common allegation in a tax evasion indictment includes a charge that the taxpayer filed a false and fraudulent return. However, some conduct that takes place after the filing of a return can form the basis of an attempt to evade tax. For example, a statement made by a taxpayer after the filing of the tax return can count as an “attempt” under section 7201 if the statement is made for the purpose of concealing income which was not reported on the tax return. Other types of post-filing conduct can also be considered attempt for the purposes of tax evasion.

Element 3: Willful Conduct

The final component of the tax evasion statute requires willful conduct on the part of the taxpayer. This means that the attempt to evade or defeat tax must be willful. In United States v. Pomponio, the Supreme Court held that the definition of willful requires “a voluntary, intentional violation of a known legal duty.” Later cases expanded on this concept, setting forth the elements that the prosecution must show in order to prove the willfulness of the taxpayer’s conduct. In Cheek v. United States, the court stated that willfulness requires showing (1) voluntary action; (2) intentional conduct; and (3) knowledge of what the law requires. Thus, there can be no willfulness on the part of the taxpayer where his or her actions were taken through inadvertence, carelessness, or an honest mistake as to the law.

In proving the willfulness of the taxpayer’s conduct, the government will attempt to show the taxpayer’s intent through skillful presentation of all the facts and circumstances. The willfulness of the taxpayer’s tax evasion attempts may be inferred from wholly circumstantial evidence. In tax evasion cases, this proof usually comes in the form of evidence that the taxpayer used a mainly cashed-based business, failed to keep adequate records, or deliberately made false statements to agents. A pattern of underpayment by the taxpayer has been used by the government to show that the taxpayer’s behavior constituted a willful attempt to evade tax.

In attempting to rebut the government’s claims that conduct was willful, taxpayers may successfully argue that they relied on a competent tax preparer or adviser in reporting their income and filing tax returns. Other successful arguments may be that the taxpayer was ignorant of the law or made an honest mistake in understanding the law. However, any of these arguments will almost certainly fail if the government can show that the taxpayer was aware, at the time he or she signed the tax return, that the tax return did not accurately reflect the taxpayer’s income. Along a similar vein, willful conduct for the purposes of tax evasion can be found where taxpayer’s conduct amounts to “willful blindness”.

How a Tax Attorney Can Help

If you are under investigation by the IRS for criminal tax evasion then you must consult with an experienced tax attorney. The Tax Lawyer - William D. Hartsock has been successfully helping clients with criminal tax issues since the early 1980s. Mr. Hartsock offers free consultations with the full benefit and protections of attorney client privilege to help people clearly understand their situation and options based on the circumstances of their case. To schedule your free consultation simply fill out the contact form found on this page, or call (858) 481-4844.

Tax Law References:

  1. IRC § 7201.
  2. Spies v. United States, 317 US 492, 498-499 (1943).
  3. Id.
  4. King v. United States, 126 F3d 987 (7th Cir. 1997).
  5. United States v. Beacon Brass Co., 344 US 43 (1952).
  6. Holland v. United States, 348 US 121 (1954).
  7. United States v. Olbres, 61 F3d 967 (1st Cir. 1995), cert. denied, 116 S. Ct. 522 (1995).


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