NCJ Number
74650
Journal
American Criminal Law Review Volume: 18 Issue: 2 Dated: (Fall 1980) Pages: 298-307
Date Published
1980
Length
10 pages
Annotation
A discussion of Federal income tax evasion statutes examines the elements of the crime, distinguishes felonies from misdemeanors, and highlights defenses.
Abstract
Section 7201 of the U.S. tax code assigns felony status to attempts to evade or defeat tax payment. Tax evasion comprises willful evasion of tax payments due, and the government must prove each element beyond a reasonable doubt to convict an offender. Tax deficiency may be proved by showing that the taxpayer underreported income by a substantial amount. Various methods of proof may be used, including the net worth, bank deposit, and cash expenditures methods. When tax deficiency is shown to exist by the Government, the burden of proof shifts to the defendant. However, the U.S. Supreme Court has ruled that the government must prove an attempt to evade or defeat payment to support a conviction for felonious evasion. Mere willful neglect of the duty to pay taxes is a misdemeanor. Such neglect would include failure to file returns or keep records, while felonious activities consist of willfully concealing income. In felonious evasion, proof of willfulness is largely inferential, resting upon the allegation of tax deficiency together with direct evidence of conduct indicating an attempt to evade payment. Defenses for tax evasion charges include placing blame on a third party who has prepared the tax return; however, such attempts frequently backfire. However, the fifth amendment privilege against self-incrimination, and defendant allegations of selective prosecution are not acceptable defenses. Finally, IRS investigators need not give Miranda warnings, although IRS regulations explicitly inform the taxpayer, in a noncustodial interview of the criminal nature of the investigation, of the taxpayer's right to refuse to answer questions and of the taxpayer's right to counsel. Footnotes are included.