Federal Defense Attorney in Houston
Addressing and resolving tax evasion charges
A quick response to tax evasion charges with a skilled tax evasion attorney is key for building a strong defense against such accusations that can lead to severe consequences. With the support of an experienced law team, like the one at John T. Floyd, which accompanies you all along the way, you can rest assured that the best possible legal outcome will be achieved.
Take Action Against Tax Evasion Accusations
It all starts when there’s a tax evasion investigation in which you or your company is being accused of deliberately lying or hiding information to pay less than what’s legally owed to the government. Most tax fraud charges are considered felony offenses, and, if found guilty, they carry serious penalties. As soon as you are informed or suspect that you are being investigated, get in touch with us, John T. Floyd Law Firm, for a reliable tax evasion attorney.
Let’s Understand What Tax Evasion Is
A tax return is a legal obligation that individuals and corporate entities must file with the IRS or other taxing authority every year. In a general way, it requires the reporting of financial data and detailed income information, which results in the payment of all the different taxes, both state and federal. As a citizen’s responsibility, both the reporting and the final settlement need to be done by each person who, according to tax laws, is obliged to do so.
Although in Texas the state does not require an income tax, there are several other taxes, mainly for corporations, that are still important to keep in mind, such as the sales and use tax, property tax, franchise tax, excise tax, and other special taxes. Most of the state’s revenue comes from a combined state and local sales tax rate of 8.25% on taxable sales in Houston. That one, plus the property and franchise tax, makes businesses a very important factor in the state’s financing, which, in other words, makes business owners more aware of the internal financial records and income.
According to the Texas Tax Code, the penalties for not applying the Law properly are very serious, which means that every single dollar needs to be reported by filling out the indicated format and presented to the corresponding authority. So, for example, if the evasion surpasses $200,000, it’s classified as a First-Degree Felony with the potential of carrying from 5 years of imprisonment. That’s why it’s never enough to emphasize the importance of having an experienced tax evasion attorney advising you at every stage of the investigation and accusation, if it happens.
Tax Evasion Penalties
Beyond financial penalties and jail time, there are other tax evasion consequences that are important to keep in mind so that you can picture an actual image of everything that comes with this criminal offense. Especially if you are a business owner, this information may be of particular interest to you, as a complete overview of all the possible outcomes not only works as prevention but also helps in planning contingency plans for those scenarios.
Because even if the following penalties happen in parallel with the legal process- in fact, they can be executed way before even found guilty in court- an experienced law team can shield your company against them, such as preventing permit revocations, not allowing bank freezes, and protecting business owners from personal financial liability. Let’s take a closer look at the white-collar crime consequences across the key areas of a business, along with the help that a tax evasion attorney can provide.
Operational and Administrative Penalties
The state authorities can suspend or even revoke the sales tax permit, which indirectly prevents any business from selling products or services legally, so the operation needs to be stopped right away. Also, while being investigated or under a legal process, the company will be flagged before the Texas state courts, impeding them from operating or suing. Both repercussions can be avoided if there’s a formal submission of a Petition for Redetermination, something a tax evasion attorney will do under statutory deadlines (typically 30 to 60 days depending on the specific notice type).
And, finally, if a prompt agreement for a payment plan is achieved with the Texas Comptroller, the option that your company is completely forfeited from conducting business can be prevented from happening.
Commercial and Professional Consequences
One of the immediate aftereffects of tax evasion is public tax liens, and since they are filed in Harris County land records, it instantly prohibits the sale of any property. The clouding of real estate titles also results in the debarment of contract bidding, impeding, in total, any action regarding land and building properties. When this is the case, a tax evasion attorney can negotiate lien discharges or subordination agreements with tax authorities, allowing real estate to be sold or refinanced to satisfy the tax debt.
The other important repercussion that can happen right away is the reporting of the tax evasion felony to the professional licensing boards, which results in the loss of professional credentials, especially for CPAs, attorneys, healthcare professionals, and real estate brokers. That’s why having a knowledgeable tax evasion attorney supporting you makes all the difference, since one can establish communication with licensing boards and, thus, negotiate and prove the lack of criminal intent before them, therefore preserving active professional credentials.
Status and Financial Standing Exposure
According to Texas Tax Code § 111.0611, those to be held accountable for corporate tax evasion are not just the companies, but also the people behind the directive positions, meaning the directors, corporate officers, managers, and partners personally. This personal exposure tends to escalate during these white-collar investigations, which leads to embezzlement, altered accounting ledgers, and write fraud, as unrecorded funds can trigger severe state and federal tax fraud penalties.
In other words, there are also a lot of individual penalties for corporate tax evasion in Houston, Texas, one of which is the already mentioned revocation of professional credentials, but also the payment of the 50% fraud penalty, complete transfer of the underlying tax liability plus interest, and the possibility of criminal prosecution. Plus, for non-citizen immigrants or temporary visa holders, tax evasion could trigger visa cancellations, denial of citizenship applications, and even deportation.
When assessed by a qualified tax evasion attorney, there are pathways that can demonstrate an “honest accounting mistake” during the state CID or IRS audits, preventing the criminal investigation. On the other hand, there’s another way that can be taken, and that is to determine the lack of direct control over financial decisions, which shields private bank accounts.
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Facing a Full Tax Audit And What Comes Next
Everything that comes with a tax evasion charge needs to be handled properly from the very first moment. Although it’s important to keep in mind the seriousness of such a crime and its consequences, remembering that the accusation is not the same as being found guilty, as there is a legal process in the middle where a strong defense can be established, is key. Even though several reasons could lead to a tax evasion investigation, there are even more reasons to defend against tax investigations led by the Criminal Investigation Division (CID) of the Texas Comptroller of Public Accounts and local or state prosecutors in case of legal process.
But before reaching those stages, the full tax audit gives a window of time during which an agreement can be obtained when the proper decisions are made. When you have a skillful tax evasion attorney guiding you at every step, the likelihood of a positive outcome greatly increases. Right after you receive the notification letter for the upcoming tax audit, which includes the specific years and the response deadlines, reading it carefully is essential so that no crucial information is overlooked. Preparing and organizing clean copies of the requested records, including the receipts, bank statements, ledgers, and invoices, is what should follow. Remember to keep the original documents, as they could get lost in the process.
Every single communication should be mediated by your tax evasion attorney to protect sensitive data, meaning all answers should be concise and truthful, without volunteering any information that wasn’t requested. It’s very important to review the preliminary auditors’ findings to confirm that there aren’t any accounting errors or misapplication of the tax codes. This is when inconsistencies can be found, and that’s why early appeal at this stage, before the final report is locked in, can change everything. Especially when there’s a compelling argument, with the corresponding supporting documents, there’s the possibility of challenging discrepancies and avoiding worst-case scenarios.
After the letter notification has been sent, the typical window during which this type of appeal can be presented lasts 30 days. That’s why having a qualified tax evasion attorney from the very moment you are informed of the audit is paramount. Give us a call at 346-214-2554, or you can also schedule a consultation on this online form.
FAQ
What’s the difference between tax evasion and tax fraud?
Tax fraud is an umbrella term that includes all the actions intentionally aimed at deceiving tax authorities or falsifying tax documents. On the other hand, tax evasion is a type of tax fraud that involves deliberate attempts to illegally avoid assessing or paying lawful tax liability, including omitting taxable income, deliberately failing to file, and concealing offshore assets. If you are facing allegations of either, consulting a tax evasion attorney immediately is essential.
Are businesses that pay “under the table” in cash to undocumented immigrants committing tax evasion?
Yes, not reporting those payments in any accounting book makes it a payroll tax evasion criminal offense. If your company is facing payroll scrutiny, working directly with an experienced tax evasion attorney can help mitigate exposure and protect your business operations.
Are there any income taxes that need to be paid in Texas?
No. Texas is a state that does not charge income taxes to individuals or to businesses. But for some companies with gross income and, therefore, receipts, there’s the franchise tax, which is similar to the income tax but not quite the same.
Choose John T. Floyd for the best tax evasion attorney in Houston, Texas
Whether a random tax audit was conducted, a data mismatch occurred due to an accounting mistake, abrupt income changes are happening, a business partner is being investigated, or any other reason prompted the notification of an initial tax audit, you can count on us for legal representation.
With John T. Floyd’s professional assistance, any tax charges can be addressed with the attention and earnestness they require. Our tax evasion attorneys hold board certifications from the Texas Board of Legal Specialization, which makes our law firm one of the foremost experts in both Texas law and tax code.
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