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25.1.8.3
(08-17-2007)
Evasion of Payment
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IRC 7201 includes two separate offenses:
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the willful attempt to evade or defeat the assessment of a tax; and
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the willful attempt to evade or defeat the payment of a tax.
Refer to Exhibit 25.1.1-1 for a description of the elements necessary for prosecution of an IRC 7201 violation. The affirmative
acts of evasion associated with evasion of payment cases almost always involve some form of concealment of the taxpayer’s
ability to pay the tax due and owing or the removal of assets from the reach of the IRS. It should be noted that obstinately
refusing to pay taxes due, possession of the funds needed to pay the taxes, and even the open assignment of income, without
more, do not meet the requirement of the affirmative acts necessary for this felony evasion charge.
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In addition to the affirmative acts/indicators listed in IRM 25.1.2.2, other examples of affirmative acts of evasion of payment
include:
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placing assets in the names of others;
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dealing in currency;
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causing receipts to be received through and in the name of others;
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causing debts to be paid through and in the name of others;
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paying creditors instead of the government;
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bankrupting a corporation and hiding the assets to avoid payment of employment taxes; and
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a complete change of taxpayer identity.
See IRM 25.1.8.4 for examples of indications of fraud relating to false statements under penalty of perjury, i.e., Form 433-A and Form 433-B.
Note:
If someone other than the taxpayer completed and signed the Form 433-A or 433-B, the RO will need to take additional steps
to substantiate perjury. Contact the local FTA for assistance.
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When initial indications of fraud are identified, the Collection Field function employee will discuss the case with the group
manager. If the group manager concurs with the fraud potential, contact with the fraud technical advisor (FTA) should be initiated.
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