Income Tax Evasion Schemes

According to the IRS, there are several common types of income tax evasion. These evasion tactics take a variety of forms, but serve the same purpose: to avoid remitting income taxes back to the IRS. There are three identifiable schemes used to avoid income tax payment:

  • Pyramiding
  • Employment Leasing
  • Cash Payments

Pyramiding may be committed without the knowledge of the employees. Businesses who participate in this type of tax evasion withhold taxes from their employees’ paycheck but never turn the money over the IRS. Instead, they spend it on personal expenses, etc. Pyramiding companies usually disappear, but the people behind the scheme do not. Many times, individuals behind pyramiding schemes go bankrupt in an attempt to shirk responsibility for their unpaid taxes, and then start a new company with the intention of continuing the practice.

Employment leasing is not necessarily illegal, but the practice is easy to abuse. Sometimes, businesses contract with outside companies for assistance handling financial, personnel, and administrative issues. This may seem like a good idea, but some of these companies commit tax evasion by failing to remit income tax payments back to the IRS after withholding money from employees’ incomes. Many of these companies dissolve, leaving employees jobless and millions of dollars in taxes unpaid. In other scenarios, employers pay their workers in cash. By keeping their paychecks off the record, they are able to easily evade tax payments.

Are you under investigation

If you’re under investigation for a payroll-related tax crime, contact an attorney from our firm immediately. With a top-notch defense attorney fighting for your rights, you can have peace of mind that your case is in reliable and dedicated hands. Facing a criminal allegation is never easy. We understand. The sooner we hear from you, the fast we can begin creating an effective and aggressive case strategy to keep you out of jail and keep your record clean.

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