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Deliberate acts necessary to prove tax evasion

Many Washington residents and businesses pay tax preparers to fill out and file their tax returns because of the complexity of the task. When mistakes happen that cause taxes to be underpaid, the Internal Revenue Service generally takes action to inform the filer and collect the unpaid amount. If the agency suspects that the person or entity purposefully filed erroneous information to avoid taxes, then a criminal charge of tax evasion could result.

A typical case of tax evasion involves underreporting income to reduce the tax burden. The IRS can accuse either a business or individual of failing to report all income. A business that handles a lot of cash might attempt to conceal earnings because little to no paper trail exists. People who work for cash tips like restaurant servers and hairdressers might also attempt to hide undocumented income.

The inflation of expenses represents another form of tax evasion. A business might claim more expense items than actually exist to reduce the amount of profits on paper that can be taxed. On a personal tax return, a filer could mislead the IRS about the size of the household to get additional deductions and tax credits.

A person accused of tax fraud could gain important insights from an attorney about how to counter the allegations. An attorney could offer advice about dealing with IRS investigators and could organize financial records and seek to show that the client merely made an honest mistake. While this would not absolve the responsibility of having to pay what was owed, it could eliminate more serious penalties.

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