What is Tax Fraud / Tax Evasion?

Section 7201 of the Internal Revenue Code makes it a Federal crime or offense for anyone to willfully attempt to evade or defeat the payment of federal income taxes. A person can be found guilty of that offense only if all of the following facts are proven beyond a reasonable doubt: First: That the person owed substantial income tax in addition to that declared in his tax return; and Second: That the person knowingly and willfully attempted to evade or defeat such tax. The proof need not show the precise amount of the additional tax due, but it must be established that the person knowingly and willfully attempted to evade or defeat some substantial portion of such additional tax as charged.

The word "attempt" contemplates that the person had knowledge and an understanding that, during the particular tax year involved, he had which was taxable, and which he was required by law to report; but that he nevertheless attempted to evade or defeat the tax, or a substantial portion of the tax ...

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