Benjamin Franklin once said, “In this world nothing can be said to be certain, except death and taxes.” No person can avoid this certainty. Arizonans, like all other states citizens, pay taxes. The U.S. tax system functions using a voluntary compliance system. This means it is up to the person to report their income and any tax related expense. By leaving the reporting to the people, the government is trusting that people will accurately file their taxes. However, many do not.

Tax Evasion or Tax Avoidance.

Nobody likes to pay taxes. And with the U.S.’s voluntary compliance system, people will use dozens of methods to attempt to avoid paying a taxation. Although it seems counterintuitive, avoiding taxes is perfectly legal, and encouraged. The IRS will allow and advises certain taxpayers to claim eligible deductions, credits, and adjustments to income. Corporations are notorious for using these deductions, credits, and adjustments. The corporation will take all legitimate deductions and as many tax credits as possible, as well as use other means to shelter income from taxes.

Regular civilians can avoid taxes too. A common example is the working parents claiming a credit for child-care expenses. Essentially, avoiding taxes is the legitimate minimization of taxes and the maximization of after-tax income. As long as the person did not use deceit, concealment, or other affirmative acts to avoid paying taxes, it is likely a legal method of avoiding the tax.

Although tax avoidance is a legal practice, those attempting to avoid taxes still must follow Arizona tax laws. The best practice for those looking to avoid paying taxes is not to attempt to do so on their own. Rather, the person should contact an accountant or tax advisor. That accountant or tax advisor will be best able to explain the nuances in tax regulations and its affects. So, while tax avoidance is an approved legal practice, tax evasion on the other hand is illegal.

Legally, tax evasion is the intentionally avoiding of paying owed taxes. Typically, this behavior will have to occur over a lengthy period before it is considered criminal. Committing tax evasion does not require a creative scheme. In fact, it can be committed in a case where someone pays another in cash. Now, just paying someone in cash is not enough. Rather, tax evasion requires the person not to report the cash wages he paid to the IRS and state payroll tax agencies.

A few other ways of tax evasion in Arizona include:

• • Falsifying tax returns;
• • Using fake documents in tax returns;
• • Understating one’s income to pay lower taxes;
• • Not collecting employment taxes;
• • Failing to cooperate with tax collectors;
• • Providing a fake social security number;
• • Not maintaining any sort of financial record.

But, people should not be scared to file their taxes. It is ok to make a mistake. Tax officials will not immediately begin to suspect criminal activity simply because a person overlooked a small source of income. The above versions of tax evasion all require an intent element. That is, the person intentionally or knowingly avoided paying their taxes. If intent or knowledge is not found, then the person is likely only to face a penalty of about 20% of what they owed.

Potential Impact of COVID-19 on Tax evasion.

On September 13, 2019, a U.S. District Judge sentenced a Paradise Valley man to 21 months in prison, three years of supervised release, and to pay over $700,000 in restitution to the Internal Revenue Service. The man had owned and operated various organizations, which contracted with small business owners to provide payroll services. Through those companies, the man collected employment taxes from his clients. He would then file false tax returns to the IRS that overstated the tax payments he claimed to have made. Eventually he stopped filing these tax returns completely. This alerted him to authorities who then conducted an investigation into the man. The investigation concluded in finding that the man had failed to properly file his taxes to the IRS; instead keeping a significant portion of the taxes for his own personal use.

Because of the traumatic impact that the COVID-19 virus has had on the U.S. economy, it would not be out-of-this-world to predict that people will try to avoid taxing in ways similar to the Paradise Valley man above. With people struggling to make ends meet, paying taxes sounds unappetizing. By not reporting any income paid or received in cash, a person may believe they are saving money. However, those who choose to evade their taxes will still find themselves breaking the law. Despite, these troubling economic times it is highly encouraged that those struggling to make ends meet, speak with a tax official to help resolve their issue. If the person opts not to file taxes or to file falsely then that person runs a large risk of being criminally charged.

Penalties for Tax Evasion.

The consequences for evading taxes can be severe. The IRS is no entity to mess with and Arizona does not play around either. In Arizona, the law says that the act of providing false or fraudulent tax information can result in a felony charge. For first time offenders, that felony charge punishes the offender with up to five years in prison and up to $250,000 in fines. If the person only fails to file a tax return, that could result in a misdemeanor charge in which the offender faces up to one year in jail and up to $100,000 in fines. The federal government an also charge the tax evading person. If the person intentionally tried to defraud the government or used a government service or agency to commit the evasion, then that person can be facing severe federal offenses. When facing these sort of charges, it is crucial that the person retains competent legal counsel.

.-... Considered by Mothers Against Drunk Driving to be the most strict state in the nation, Arizona has brutal DUI laws. While a traditional DUI charge occurs only when someone is driving with a blood alcohol content level of 0.08 or more; as a zero-tolerance state, Arizona law enforcement has the liberty to arrest and charge anyone they suspect is driving while impaired or intoxicated. Therefore, DUI charges are exceedingly common. Once convicted, Arizona DUI law contains harsh penalties.

A first offense for DUI with a BAC 0.08% or more is a class 1 misdemeanor. If you are found with a BAC level less than 0.08% but still impaired under A.R.S. § 28-1381(A)(1), then you also would be facing a class 1 misdemeanor. Both these DUIs carry a minimum ten days in jail (nine of those days are typically suspended.) You would be required to pay fines and fees, as well as have your driving license suspended. Next, your vehicle would require the installation of an ignition interlock device. Lastly, you may be placed on probation and be required to serve community service and receive a drug/alcohol assessment. These consequences are serious and costly. Thus, it is crucial for your case that you acquire an attorney who understands Arizona DUI law and can help you.

Let Us Help

Tax evasion is a very serious felony offense that can carry a lengthy prison sentence. Fighting a tax evasion charge requires a team of highly experienced white-collar crime lawyers to ensure you receive the best results possible. Let Phoenix Criminal Lawyer’s criminal lawyers and their knowledge of white-collar criminal defense guide you through the process. The legal battle ahead will be led by strong representation and diligence.