The Law and Prosecution

An interesting example of law and prosecution is that a person can be convicted of tax evasion for not reporting illegal income, even when insufficient evidence does not exist to show that individual participated in illegal activity.  The famous gangster Al Capone was convicted on charges of tax evasion even though he could not be convicted on other charges.

The Internal Revenue Service and like other state agencies are able to calculate unreported and illegal income through differences between net worth, which can be calculated through tax returns, and actual expenditures.  If someone spends and acquires capital beyond what that individual’s net worth could allow, an obvious discrepancy exists.

Prosecutors are aided in tax evasion cases through what are known as whistle-blower programs.  These programs are incentive-laden programs which allow the whistle-blower to receive between 15-30% of the money the government is able to recover after a successful tax evasion case prosecution.  This would only apply if the government is able to recover a minimum of $2 million.

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