Tax avoidance is not a crime

On Behalf of | Oct 4, 2019 | Tax Crimes

Most Connecticut residents do what they can to lower their tax liability every year. There are a number of ways they can do this that are perfectly legal. Tax avoidance is very different than tax evasion, and it is not a crime.

Tax avoidance is where an individual uses various legal methods to adjust his or her financial situation, which ultimately lowers how much income tax he or she has to pay. What are these legal methods? They are claiming all available credits, deductions and exemptions. Lawmakers encourage tax avoidance.

Tax evasion, on the other hand, is where people purposely fail to report all of their income in an effort to reduce their tax bills. They may not even file taxes at all. Those accused and ultimately convicted of tax evasion may end up having to pay fines, restitution and/or spend time in jail. In other words, it is not something the Internal Revenue Service takes lightly.

Connecticut residents who use proper tax avoidance methods should not have anything to worry about after filing their taxes. If the IRS wishes to audit, it can. An experienced attorney can assist one through the process. If the IRS suspects a person guilty of tax evasion rather than tax avoidance, this is a far more serious issue that requires immediate attention. An attorney with experience handling tax crime cases can help one take the steps necessary to fight the accusations of tax evasion, if possible, or at least assist one in minimizing any consequences.