Is Ignorance of the Law a Valid Defense in Tax Cases?

You have all heard the phrase: “Ignorance of the law is no defense.” Well, in most cases, that is true. However, when it comes to criminal tax violations, there is a chance, under limited circumstances, when the defense of ignorance just might work. But, when dealing with facing criminal penalties, it is likely not worth it to roll the dice of a trial in criminal tax court.

In this article, we will discuss the issue of criminal tax violations and how serious they could be with regard to the penalties a tax violator may face. Remember, anytime you have an issue with the IRS, it is best to get sound advice from an experienced IRS tax defense attorney in Sarasota, Florida. When it comes to something as serious as possible criminal tax penalties, you need to know your options and be represented by a legal professional.

If, after reading this blog, you have additional questions about any tax issues, or if you are getting correspondence from the IRS with regard to taxes that you owe from prior years, we welcome you to call the IRS tax defense attorney in Florida who is ready to help you – Mary King.  

The Law Office of Mary King, P.L. provides complete IRS problem-solving services including all areas from tax debt settlement to planning the most efficient tax strategy for individuals and businesses. Call today at 941-906-7585 , or fill out our contact form.  

Yes. It might come as a surprise, but the Internal Revenue Service (IRS) has a criminal investigation unit, and their role is to investigate and prosecute people who commit tax fraud, and other types of tax crimes.  

Now, no need to get too nervous. Criminal penalties for those who commit tax violations are not focused on those who make a simple mistake on a tax return. With most cases, issues with the IRS are dealt with in the world of civil penalties – fines, fees, etc. Criminal penalties, by contrast, are reserved for those who are accused of intentionally trying to avoid paying taxes on a large scale, and who often go through some elaborate schemes to do so.  

In fact, to get a little context as to what an IRS criminal case might look like, we’re going to tell you about a case that our firm learned about not that long ago. It is the case of the tax violator who was too clever for his own good. This person actually tried to use the defense of ignorance, but was not as successful in doing so as he would have liked.

Twenty-years ago, the subject of our discussion – let’s call him Joe – got wind of a group of people who are known as “tax defiers.”  The tax defiers, in fact, had some educational materials that assisted people with how to avoid taxes, and even to avoid accusations of criminal tax fraud. Joe obtained some of those educational materials. 

Joe then began to engage in conduct to avoid paying taxes. Joe used cash whenever possible and he took the only asset in his name – his house – and drained it of virtually all of its equity. The IRS later concluded that Joe’s conduct in draining the equity in the home was to ensure that the home would be so devoid of value that the IRS would not want to bother seizing it in a criminal IRS prosecution.  

Eventually – after about two decades – the IRS Criminal Investigation Unit brought Joe to court. Joe claimed that he was innocent of any criminal tax violations because, he claims, he did not know he was breaking the law when he neglected to file tax returns for almost 20 years.  

The jury in Joe’s case, however, did not look as favorably at Joe’s claim of ignorance of the law. Joe ended up being convicted of tax crimes, and being sentenced to six and a-half years in prison, and $1.5 million in restitution.  

The moral of the story is that avoiding paying taxes, even under the impression that somehow paying taxes is unconstitutional or because you did not know you needed to pay them, will probably not end well for you in the long run.  

As noted earlier, in virtually all criminal law cases, ignorance of the law is not a defense. But, when it comes to IRS violations it is possible. Specifically, in a criminal tax case, if a defendant can reasonably show that his or her actions were not knowingly committed with the intent to defraud the U.S. government, then a jury may be permitted to consider good-faith ignorance as a defense.  

That defense, in fact, was often used back in the day when people were accused of failing to pay taxes on money held in foreign banks. These days, however, it is more commonly known that money sitting in off-shore accounts is still normally within the reach of the IRS.   

Being accused of a tax violation is a serious matter that requires representation from an IRS tax defense attorney in Florida. Whether the issue is civil or criminal, there are a host of benefits that flow from getting the sound advice and benefitting from the experience and resources of an attorney who has confronted the IRS in many cases, on many occasions.

Indeed, the U.S. tax code is complex and is not something easily navigated by a person who does not have legal training.  

The Law Office of Mary King P.L., an experienced IRS tax defense attorney in Florida, offers complete IRS problem solving services including all areas from tax implications of alimony to planning the most efficient tax strategy for individuals and businesses. Call our tax attorneys in Florida today to schedule an initial consultation. With years of experience, the Law Office of Mary E. King can make sure that your tax issues are resolved in your favor. Fill out our online contact form , or call us at 941-906-7585.

The post Is Ignorance of the Law a Valid Defense in Tax Cases? appeared first on Law Office of Mary E. King P.L..