Legal ramifications of tax evasion

On Behalf of | Feb 7, 2018 | white collar crimes

Tax season has rolled around again, and Missouri business owners have been busy gathering documents to hand over to their accountants for official assessment of the amounts they owe. When preparing to report profits and losses for the year, choosing to disclose assets candidly is a good first step. Reviewing the legal ramifications of tax evasion may help in that choice.

In 2017, the United States Department of Justice reported that a Kansas City scrap metal dealer pled guilty in U.S. District Court. The charge was tax evasion. The DOJ said the dealer “concealed and attempted to conceal from the IRS the nature and extent of his assets.”

The DOJ said the man used multiple strategies to hide his profits, including paying employees with cash and bypassing the bank in monetary dealings. Now he faces time in federal prison; a judge may sentence him to as many as five years for his actions. 

The State of Missouri does not look favorably on tax evaders, that is, those who intentionally hide their assets from the Internal Revenue Service. However, according to FindLaw, when handing out penalties, the courts consider the level of fraud and the intent of the one who committed it. Note that discovering the scope of the intent to commit fraud is a key component in the case.

FindLaw explains the punishment for such white-collar crimes may include penalties for individuals and for corporations. Often evaders have to pay fines in addition to settling tax debts with state and federal governments. Depending on the severity of the fraud, those who evade paying taxes may also spend time in jail.