Tax Evasion Case

1. Tax Evasion Case

Tax evasion means to beat the obligatory tax in an illegal way.

Tax evasion case is a case that a taxpayer or an employer who has obligation to withhold taxes, with intent to evade tax, “by deceit or other wrongful acts”, escapes from paying tax such as income or corporate tax, or gets a tax refund. Article 238 of the Income Tax Act and 159 of the Corporate Tax Act provide the punishment.

Specific Examples Article 238 (8) of the Income Tax Act

A person who, by deception or other wrongful acts, evaded income taxes provided in Article 120(1)(3) (amount of income tax pertaining to filing an income tax return) (including the cases where applied mutatis mutandis pursuant to Article 166 (application mutatis mutandis to non-residents)) (if there is deductible money according to Article 95 (foreign tax credit), the amount of income tax calculated according to the provision of the said number without applying the provision of the said article ), or provided in Article 172(1)(1) or (2)(1) (tax payment by self-assessment where there was no withholding at the source of wages, etc.), or got refund of income tax provided in article 142(2) (refund of income tax as a result of carryback of net loss) (including the cases where applied mutatis mutandis pursuant to Article 66) shall be punished by imprisonment with work for not more than 10 years or a fine of not more than 10million yen, or combination thereof.


2. Methods of Tax Evasion Case

Methods of tax evasion case include false underreporting (underreport the amount of tax payment), false non-filing (exceed the legal due date of payment without filing), and false filing of amended return.


3. Flow of Tax Evasion Case

Normally tax and criminal investigation (field audit) are to be carried out by a taxation bureau in tax evasion cases. When it was qualified that a violation such as tax evasion was found, the taxation bureau brings a charge to a public prosecutor.

The public prosecutor who received the criminal accusation from the taxation bureau takes over the tax evasion case from the agency and begins to investigate the case as a criminal case. At this investigation stage, one who evaded tax could be arrested and detained by the investigative authority.

If the investigative authority had got evidence of tax evasion through house research and prosecuted him / her, the suspect almost always could be guilty.

Within this flow of tax evasion case, it is important to consult with the lawyer from the stage of tax and criminal investigation (field audit) by the National Tax Agency. Tax investigators as tax professional carry out tax and criminal investigation (field audit) in depth. It is necessary to deal with the investigations promptly and properly to prevent from leading to criminal cases.


4. Prospect for Tax Evasion Case

In tax evasion cases, the amount of tax evasion, method employed in tax evasion, amended return, tax payment status, etc. are to be considered as important factors in accusation, prosecution, and sentencing. When the amount of tax evasion exceeds one hundred million yen, the percentage of tax return is prominently low, the method employed is skillful, heinous and well-planned, the tax evader becomes increasingly likely to face criminal accusation or prosecution. If he/she was prosecuted and stands trial in a criminal court, the tax evader is highly likely to get a prison sentence.


~Points of Defense Activities in Tax Evasion Case~

 When a tax payer evaded tax, he/she becomes increasingly likely to face criminal prosecution. For that reason, it is important to consult with lawyer from the early stage before prosecution such as the stage of tax and criminal investigation (field audit), or accusation to a public prosecutor.

Lawyer aims at gaining as much moderate disposition as possible by doing appropriate defense activities from the stage of investigation by the National Tax Agency and making a consistent claim. Because the tax evasion case is the crime of intent, a lawyer would persuasively assert that the tax evader had no intent nor plan to evade tax. Even in cases where the tax evader generally admits the fact of the tax evasion case, the lawyer would also assert aggressively the circumstances in favor of the accused about the circumstances to be consider in deciding the sentence such as the amount of tax evasion, method employed in tax evasion and planning, amended return, tax payment status.

It is just conceivable that it is possible to avoid actual prison sentence and gain suspended sentence by submitting revised tax return and paying tax based on the submission as soon as possible.

At AICHI Criminal Cases Law Firm, good lawyer in the field of tax evasion case give you the best advice. Criminal and juvenile lawyers personally provide with “free consultation”. If the suspect got arrested, the firm also provide with “the first interview service” which our lawyers personally goes where the suspect is to have an interview, at the shortest on the day.




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