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What does it really mean to evade taxes?

Filing taxes can certainly be a mundane activity, but avoiding them completely is another matter. Many professionals turn away from recording tax liabilities as a result of financial struggle, among a multitude of other reasons. But regardless of the cause, tax evasion in California is a crime that can come with costly penalties. 

Anyone is capable of avoiding taxes, including the owner of Subway restaurants in the Orange County area. According to The Orange County Register, Ajay Beri pleaded guilty to a sale tax evasion charge last November, after which he faced nine months' jail time and a hefty fee of $3 million. The day Beri pleaded guilty, he also paid $1.3 million in repayment, with plans to pay the remaining $1.3 million by May 2018. Ajay Beri Corporation, Beri Restaurants Group and ownership of Subways across Orange and Los Angeles counties were Beri's main successes, but this prosperity took a turn when the owner collected sales tax on food purchased by Subway customers and intentionally filed fraudulent sales tax returns to avoid paying his full amount in taxes.  

It is clear that penalties for evading taxes can depend on the severity of the crime, but one aspect that commonly confuses taxpayers is the difference between tax planning and tax evasion. An article in Forbes magazine considers the fine print when it comes to filing taxes correctly, and which actions are considered crimes. Because the IRS tax return must be filed under penalties of perjury, making the right decisions about taxes can prove to be a stressful endeavor. Many taxpayers assume that if they have not purposefully cheated on taxes, they will not face penalties. However, Forbes points out that it is the burden of the taxpayer to prove they unintentionally made mistakes on filing taxes, and that intentional evasion requires a willful, voluntary violation of an established legal duty.      

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