26 U.S.C. § 7206 – Fraud and False Statements
This statute makes it a federal felony to willfully make false statements or submit fraudulent documents in connection with federal tax matters.
What this statute does.
Section 7206 targets affirmative falsehoods in tax-related filings and proceedings. Unlike failure-to-file statutes, this provision focuses on documents that are submitted but are false as to material matters.
The government does not need to prove a tax deficiency or successful evasion—only that a materially false statement was made willfully.
Core prohibited conduct.
The statute criminalizes several categories of conduct, including:
- Signing a tax return or other document under penalties of perjury that the defendant does not believe to be true and correct in every material respect
- Aiding, assisting, counseling, or advising in the preparation or submission of a false or fraudulent tax document
- Falsifying or fraudulently executing bonds, permits, entries, or similar tax-related documents
- Removing, depositing, or concealing taxable goods or property subject to levy with intent to defeat tax assessment or collection
- Concealing assets or falsifying records during compromise or closing agreement negotiations with the IRS
Materiality matters.
The false statement must relate to a material matter—one capable of influencing the IRS’s decisions or actions. Trivial or immaterial inaccuracies do not satisfy the statute.
Felony offense.
A violation of § 7206 is a felony, regardless of the amount of tax involved.
Penalties.
Upon conviction, a defendant faces:
- Up to 3 years in federal prison
- Up to $100,000 in fines ($500,000 for corporations)
- Payment of costs of prosecution
Criminal exposure under § 7206 is separate from any civil tax liability, penalties, or interest.
Why this statute is commonly charged.
Section 7206 is frequently used when prosecutors can prove falsity and intent but cannot—or do not need to—prove full tax evasion under § 7201. It is also commonly charged against return preparers and third parties.
If you are under investigation or charged with federal tax fraud or false statements, call (314) 900-HELP or contact our federal criminal defense attorneys to discuss your situation.
