William G. Yarborough

What is the difference between tax evasion and tax fraud?

Free Evaluation
100% Secure & Confidential

Tax evasion and tax fraud are terms that are often used interchangeably. However, their meanings and impacts are distinct.

Both involve intentional wrongdoing related to taxes but diverge in their specific definitions, consequences and legal ramifications. Educating oneself on the key differences between these two terms can provide clarity when navigating the complex terrain of tax law.

What is tax evasion?

Tax evasion refers to the illegal act of deliberately underpaying taxes owed to the government. It encompasses various deceptive practices that conceal income, assets or financial transactions to evade tax liabilities. Common methods of tax evasion include:

  • Underreporting income
  • Overstating deductions
  • Hiding assets offshore
  • Engaging in cash transactions to bypass taxable income

At the heart of tax evasion lies deliberate intent. Taxpayers may knowingly engage in deceitful tactics to evade their tax obligations, often resorting to elaborate schemes to conceal income and assets from tax authorities.

Tax evasion is considered a serious criminal offense; individuals found guilty of tax evasion may face severe penalties, including hefty fines, imprisonment or both.

Unlike inadvertent errors or omissions on tax returns, tax evasion involves willful noncompliance with tax laws. It reflects a conscious effort to circumvent the legal duty to report and pay taxes accurately.

What is tax fraud?

Tax fraud encompasses a broader spectrum of illicit activities related to tax matters, including both civil and criminal violations. While tax evasion represents a specific form of tax fraud, the latter encompasses a wider range of fraudulent conduct, such as:

  • False representations
  • Fraudulent documents
  • Deceptive practices to evade taxes or obtain unlawful tax benefits

Tax fraud often involves fabricating or altering financial documents, such as invoices, receipts or records, to inflate deductions, understate income or misrepresent expenses. Concealing income constitutes another prevalent form of tax fraud. Taxpayers may resort to offshore accounts, shell companies or other covert means to hide income from taxation.

Tax fraud may also manifest through the submission of false claims or credits on tax returns. This could involve overstating expenses, inflating deductions, fraudulently claiming tax credits to reduce tax liabilities or obtaining refunds to which one is not entitled.

While tax evasion and tax fraud are terms often used interchangeably, they represent distinct legal concepts. By understanding these differences, taxpayers can more effectively navigate the complexities of tax compliance and seek legal counsel when the need arises.

Frequently Asked Questions

How do I know if I need a lawyer?

If you have been charged with a crime, arrested, or under investigation then you need a lawyer.

When you’re charged with a crime, there may be potential penalties that you’re not aware of. But there are ways to defend against the charges, too. Your lawyer can strategize for your case. They can represent you in court and to the prosecutor, putting their expertise to work for you.

Even if the charges don’t seem significant now, they may affect you in the future. Your lawyer defends your freedom and your best interests. If you’re facing a criminal charge or police investigation, contact a criminal defense lawyer.

What steps should I take immediately to protect my rights?

If you’re arrested or charged with a crime, be polite – but don’t consent to any search. Politely say that you refuse to answer any questions. Don’t resist the law enforcement officer.

Exercise your right to remain silent. This includes law enforcement officers before and after the arrest. It also means not talking to others at the police station, your friends, extended family, and social media. The things you say can be used against you.

Ask to contact your lawyer. Then call us right away. We can represent you at your next court hearing. Save everything that you think may be relevant to the case.

How long will my case take?

Every case has a different timeline depending on the severity and facts of the case. Some criminal charges can be resolved in just a few weeks. Others can take several months.

As your lawyer, William G. Yarborough will help you balance the various factors. It can take time to build defenses and/or negotiate a favorable plea agreement. It may be worth it to wait to go to trial. Other times, it’s best to take a plea deal.

What’s right for you depends on multiple factors. Attorney Yarborough can advise you on what he thinks is your best course of action.

Will my case go to trial?

There may be non-trial options available to you. You may secure a plea bargain or a pre-trial case diversion. Sometimes, preliminary motions can result in charges being dismissed.

However, you always have the right to a trial. In a trial, the prosecutor must prove the charges against you beyond a reasonable doubt.

Most cases don’t end up going to trial. But what matters is your case. Attorney Yarborough will work with you on a personalized case plan that reflects your interests and goals.

If your case does go to trial, Attorney William G. Yarborough is prepared to aggressively defend you in court.

WGY Logo White

100% Confidential
Available 24/7

Call 864-808-6871

"*" indicates required fields