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Good Faith Defense

Developing A Good Faith Defense


Tax fraud is any act in which a taxpayer willfully misrepresents or omits facts with the explicit intention of evading a tax that is known to be due. Accordingly, the center of an IRS investigation in determining whether a taxpayer committed fraud is willfulness. The IRS identifies willfulness as any voluntary, deliberate act that intentionally violates one’s known legal obligations. Because willfulness is subjectively measured and must be inferred from the particular details of each case, the Good Faith Defense is a commonly used argument to charges involving fraud as it can demonstrate that inaccuracies in reported tax were legitimate mistakes, rather than fraud.

Possible Grounds for a Good Faith Defense include the following:

  • Evidence which establishes that a person made a mistake in judgment, an error in management, or was careless
  • An honest opinion believed or entertained by an individual that he/she did not violate any tax law, even though that belief may be mistaken or an erroneous opinion
  • An undetermined evaluation as to whether a specific transaction should be regarded as taxable income due to a vague or unsettled tax law
  • One’s general educational background and experience.

Baseless Grounds for a Good Faith Defense include the following:

  • Tax Fraud
  • An individual’s belief that tax laws are unconstitutional
  • Intentionally choosing to ignore activities or actions known or presumed to be wrong when those behaviors should have otherwise been evident;
  • Substantial understatement of income in successive years.
  • Prior and sequential similar acts, such as persistently understating income or failing to maintain proper financial records ;
  • Failing to supply an accountant with accurate and complete information.

Seek Counsel Today

The good faith defense has been used successfully in the past. However, it is essential that you choose a law firm that truly understands the workings of this type of defense. At Easter & DeVore, Attorneys at Law, we understand this type of defense better than most.

To retain our services or the services of any of our skilled defense attorneys, contact our law office by calling 865-566-0125 or filling out this contact form.

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