In civil fraud cases, the Government must prove fraud by clear and convincing evidence. Civil vs. Criminal Civil fraud cases are remedial actions taken by the government such as assessing the correct tax and imposing civil penalties as an addition to tax, as well as retrieving transferred assets. Civil penalties are assessed and collected administratively as a part of tax. One tax fraud offense may result in both civil and criminal penalties. Avoidance vs. Evasion Avoidance of tax is not a criminal offense.
Taxpayers have the right to reduce, avoid, or minimize their taxes by legitimate means.
One who avoids tax does not conceal or misrepresent, but shapes and preplans events to reduce or eliminate tax liability within the perimeters of the law. Evasion involves some affirmative act to evade or defeat a tax, or payment of tax. Examples of affirmative acts are deceit, subterfuge, camouflage, concealment, attempts to color or obscure events, or make things seem other than they are. Badges of fraud can consist of one or more acts of intentional wrongdoing on the part of the taxpayer with the specific purpose of evading tax. No fraud can be found in any case unless affirmative acts are present.