William D. Hartsock is one of the most respected tax attorneys in California. Here Mr. Hartsock explains what constitutes a tax crime. For more information contact Mr. hartsock at (858)481-4811 or visit www.TaxLawFirm.net One of the most common types of tax crime is tax evasion, which is defined as failing to report taxes, reporting taxes inaccurately, or completely avoiding paying taxes. Tax evasion is taken very seriously, and IRS tax evasion penalties can be very strict. Some key indicators of tax evasion include: A person claims a large number of deductions in proportion to their income A person with a great deal of assets declares a very small income While the IRS conducts audits of taxpayers at random each year, most audits are a result of unusual activity. The IRS has more than 3,000 special agents trained specifically to gather the necessary information used to detect tax evasion. These agents have access to tax returns, as well as the ability to issue a summons for further access to financial information, and the power to seize or freeze monies in the attempt to collect any additional financial information required for investigation.