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Tax fraud, which is also referred to as tax evasion, is a white-collar crime and is defined as a willful attempt to evade tax law or to defraud the IRS and other tax-collecting agencies. If you’re facing a state or federal financial crime investigation or charge, you need experienced attorneys to take a look at your case.
Tax fraud occurs when a person or a company does any of the following:
- Willfully fails to pay taxes
- Fails to file tax returns without reason
- Prepares and files a false return
- Makes fraudulent or false claims
- Deliberately fails to report all income received
- Does not account for an offshore account
- Does not charge sales tax to customers
Much like anyone can be audited by the IRS, anyone can commit tax evasion. However, workers paid in cash and self-employed taxpayers running cash-based businesses are the most common suspects of tax crimes because it is easy for them to underreport their cash income.
Negligence or Fraud?
It’s relatively common knowledge that taxes are complicated. As such, the IRS assumes that mistakes related to taxes are honest errors rather than a willful evasion of the tax code. Auditors typically consider mistakes attributable to negligence and, instead, look for common types of suspicious activity such as:
- Willfully underreporting income
- Claiming a false exemption
- Concealment or transfer of income
- Overstatement of deductions
- Using a fake Social Security number
State and federal financial charges are serious matters. Depending on your case’s circumstances, you could face a charge of state tax fraud and federal tax fraud if you’re accused of evading both taxes. The type of fraud will determine which penalty is most appropriate.
A penalty is automatically applied to individuals who have an interest in unpaid taxes in North Carolina. According to North Carolina General Statutes §105-130:
- A 5% monthly penalty of unpaid tax is imposed on those who do not file by the original due date.
- A 10% late payment penalty is also imposed unless an extension is granted and 90% of the taxes are paid.
- Individuals found guilty of tax fraud will pay a 50% fraud penalty if convicted.
The penalties for income tax fraud are severe on the federal level. When the accused is convicted, they are guilty of a felony and subject to other penalties allowed by law, including:
- Imprisonment for up to 5 years
- A fine of up to $250,000 for individuals
- A fine of up to $500,000 for corporations
Defense for Tax Crimes
Don’t make a voluntary disclosure to the IRS before seeking the advice of a North Carolina criminal tax lawyer. Even if your error was an honest mistake, you’d need a defense attorney to build the case of negligence.
There are several ways that a criminal defense lawyer can help you defeat charges of tax crimes, including the following common defenses:
- Insufficient evidence
- No intent to commit a crime
If you’ve been convicted of tax fraud, count on an experienced Raleigh criminal defense attorney to provide you with an aggressive defense to protect you and your rights.
Contact Dysart Willis Today
Tax crimes are serious issues with serious consequences, ranging from jail to fines, life-long probation, and damage to your professional and personal reputation. The attorneys at Dysart Willis understand the stakes of your situation and will work with you to build a strong defense. Prosecuting attorneys for tax evasion can be particularly aggressive in court, so having a team in your corner to hear your side of the story is invaluable. To get started, call us at 919-747-8380 or contact us online to schedule an initial consultation.