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Common examples of tax evasion

On Behalf of | Dec 7, 2023 | Criminal Defense

Violent crimes such as murder often take up much of the focus in the media. Nonetheless, crimes don’t have to be violent to be serious. White collar crimes are prioritized by the government and law enforcement and the penalties for these offenses can be severe.

Tax evasion is one example of a serious white-collar crime. Tax evasion differs from tax avoidance in the sense that evasion relies on unlawful methods. Outlined below are four common examples of tax evasion.

Using untraceable revenue streams

Cryptocurrencies have taken off in recent decades, with many businesses opting to use these currencies for transactions. This in itself is not unlawful, but businesses need to ensure that they are still honoring their tax obligations.

As cryptocurrency gives a sense of anonymity because it is not easily traced, some business owners can fall into the trap of believing they do not have to pay tax on it. Business owners must accurately report cryptocurrency earnings on their tax returns.

Using a third party

Another common example of tax evasion involves using a third party to hold onto business earnings. For example, if a business owner takes profits for the year and transfers them to a friend or family member’s account instead of keeping the money in the business accounts.

Transferring the money to a separate and unrelated account to the business does not change the fact that the money was generated by the business, and is thus taxable.

These are just two of the more common examples of tax evasion. If you’re facing charges of this nature then the matter is serious. Seek legal guidance to explore your criminal defense options.