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Is ignorance of the law a defense for tax crimes?

| Jan 9, 2019 | tax crimes

Some people say, “ignorance is bliss.” Similarly, it might also be a defense against tax crimes.

In 1991, the United States Supreme Court ruled in Cheek v. U.S. that “a good faith misunderstanding of the law or a good-faith belief that one is not violating the law negates willfulness.” Willfulness involves intentional disregard for the law. Therefore, if a person does not have knowledge of his or her legal duty or intention to break the law, courts will not likely be able to prove that a person broke the law.

Apart from tax violations, the United States does not generally allow ignorance of the law as a defense. Common law assumes that American citizens are aware of their legal duties. However, because tax laws are complex and can be difficult for the average person to understand, there must be an additional element of willfulness, or “a voluntary, intentional violation of a known legal duty.”

Proving a person willfully broke the law can be a difficult task. The Court in Cheek reasoned that three elements must be present to prove a person acted willfully regarding tax laws:

  1. The law prohibited the defendant from an action.
  2. The defendant had knowledge the action was against the law.
  3. The defendant intentionally and freely acted against the law.

If a person acts in good-faith, but misunderstands the law, it can be hard for a court to prove he or she intentionally violated his or her legal duty. However, a person cannot act with willful blindness, which means he or she cannot intentionally remain ignorant of the law. Similarly, a person cannot merely disagree with the law and claim that he or she acted in good-faith.

Tax laws can be extremely complex. Citizens found guilty of intentionally breaking tax laws in the United States can face severe fines and penalties, including jail time. If you are suspected of violating tax laws or are concerned that you have violated your legal duties, contact an experienced tax attorney before it is too late.