Bay Area Estate And Tax Planning Law Firm

When does it morph from tax avoidance to tax evasion?

On Behalf of | Sep 12, 2019 | Uncategorized |

One is lawful. The other can yield a lengthy prison term and financial penalties of a staggering degree. The former is part of a strategy that is both recommended and implemented by proven estate planning attorneys. The latter is a flat taboo that none of those professionals would ever endorse.

Today’s blog post spotlights tax avoidance and tax evasion, respectively. Avoidance is a lawful tactic/strategy that helps to promote the interests of tax filers in California and nationally. Conversely, evasion — which could never logically be termed a strategy — is a criminal act and certain recipe for stark legal challenges.

It is a virtual certainty that every reader of our Bay Area estate planning blog posts at the Law Offices of Connie Yi engages in tax avoidance when dealing with the IRS. The very act of selecting a standard deduction in lieu of itemizing deductions (or vice versa) is a purposeful act of lawful tax avoidance. The IRS actually provides filers with a slew of avoidance opportunities enabling them to minimize tax outlays and save money.

Tax evasion is an altogether different animal. An in-depth online overview of the subject matter spotlights the tactic as being nothing more that “the use of illegal means to avoid paying taxes.” That might mean a filer’s purposeful underreporting of income. Some filers claim fictitious deductions. Others hide income in foreign accounts or report it incorrectly.

The latter scenario is sometimes relevant for clients of our Pleasanton estate planning firm. Many American expatriates and citizens born abroad who continue to have a strong nexus with one or more countries outside the U.S. can easily enough find themselves in legal hot water with domestic tax authorities.

We provide strong legal guidance and representation for many of those individuals and families. As we underscore on our firm’s website, we help them “disclose their foreign accounts, reduce their tax liability and avoid criminal charges.”

We welcome contacts to the firm concerning any questions or concerns regarding offshore tax issues.

 

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