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White Paper

IRS Civil-Criminal Penalties - Willfulness

IRS Civil-Criminal Penalties - Willfulness

“Under the IRS rules, the willfulness element essential for a criminal tax evasion charge is defined as follows: (see IRS Criminal Tax Division/Office of Chief Counsel Tax Crimes Handbook)

"Willfulness is the voluntary, intentional violation of a known, legal duty: See: Cheek v. US 498 US 192, 200-201 (1991); US v. Pomponio 429 US 10,12 (1976); US v. Bishop 412 US 346, 360 (1973).

The subjective test is "A defendants' good faith belief that he is not violating the tax law, no matter how objectively unreasonable that belief may be, is a DEFENSE IN A TAX PROSECUTION. See Cheek, supra.

Mental impairment can be a defense subject to a medical evaluation which may include; loss of memory from drug/alcohol addition, brain impairment from personal injury (e.g.. car accident), or disease (Alzheimer's disease affected over 5m US people of all ages in 2015).

The key issue is whether there was a mental impairment at the time a tax crime was committed e.g. failure to declare an offshore account, failure to report income and other tax crimes.”

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Our author, Gary S. Wolfe, has more than 34 years of experience, specializing in IRS Tax Audits and International Tax Planning/Tax Compliance, and International Asset Protection.

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