Tax evasion is the criminal offense of a person or entity using illegal methods to avoid paying the person or entity’s true tax liability. The Internal Revenue Code—a federal statute located in the United States Code—states that “[a]ny person who willfully attempts in any manner to evade or defeat any tax imposed by this title or the payment thereof shall, in addition to other penalties provided by law, be guilty of a felony and, upon conviction thereof, shall be fined not more than $100,000 ($500,000 in the case of a corporation), or imprisoned not more than 5 years, or both, together with the costs of prosecution.” 26 U.S.C. §7201.

Tax evasion is also a criminal offense under state law when a person or en,tity uses illegal methods to avoid paying state income, property, sales, franchise, payroll, and other taxes.

In Washington State, tax evasion is considered a serious criminal offense, both under federal and state law. Federally, the Internal Revenue Code (26 U.S.C. §7201) stipulates that any individual or entity that willfully attempts to evade or defeat any tax is committing a felony. Penalties for such an offense can include a fine of up to $100,000 for individuals ($500,000 for corporations), imprisonment for up to 5 years, or both, along with the costs of prosecution. While Washington does not have a state income tax, tax evasion can still occur in relation to other state taxes such as property, sales, and business and occupation taxes. The state has its own statutes and regulations to address tax evasion, and individuals or entities found guilty of evading these taxes may face similar severe penalties, including fines and imprisonment. An attorney can provide specific guidance on the consequences of tax evasion in Washington State and the potential defenses that may be available to those accused of this crime.