Tax fraud, on the other hand, is the intentional and willful attempt to evade income tax laws or defraud a tax collecting agency. This does not refer to simple mistakes tax payers make on their 1040s, fraud is the knowing and willful attempt to use misrepresentation for financial benefit. Examples of tax fraud or tax evasion include:
- Preparing and filing a false return
- Making false claims
- Intentionally refusing or failing to file an income tax return
- Willfully failing to pay lawfully due taxes
- Deliberately failing to report all income sources
Many people who are accused of these actions will be charged in both state and federal court because North Carolina prosecutes state tax crimes and the Department of Justice prosecutes federal tax crimes. You need to work with an experienced tax fraud attorney who can represent you both in county courtrooms and the Eastern District of North Carolina federal court, such as our team at Sandman, Finn, & Fitzhugh.
North Carolina Penalties for Tax Fraud
Per North Carolina General Statutes § 105-130, if taxes are unpaid, a basic 5 percent penalty occurs each month, up to a maximum 25 percent of the balance due. A 10 percent late payment penalty applies as well, at least in most cases.
Additionally, the law imposes a 20 percent “collection assistance fee” on any penalties, interest, and taxes not paid within 90 days of the due date. A conviction means an additional 50 percent fraud penalty. At Sandman, Finn & Fitzhugh, we fight these penalty impositions and also pursue appeals if necessary.
The potential penalties in federal tax fraud cases are even more severe. Federal tax evasion is a felony punishable by up to five years in prison, a fine of up to $250,000 for individuals and $500,000 for corporations, and court costs. The penalties for making a false statement on your tax returns are three years in prison and the same fines.
Contact our Tax Fraud Attorneys in Raleigh Today
A federal or state tax fraud conviction could lead to lifelong consequences, from prison time to a criminal record that prevents you from getting a job or renting property. To schedule a free case evaluation, contact our Raleigh tax fraud attorneys at (919) 887-8040 or fill out our online form to get started.