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What are the penalties for tax fraud?

Facing any type of criminal allegations is a serious matter; however, some do not realize how criminal charges could stem from a wide variety of situations. Take for example taxes. Residents in New York and elsewhere are expected to pay taxes if they are owed. Nonetheless, the IRS could determine that one did not pay what they owe or at all. Such a situation could result in tax fraud charges, which can carry with them harsh consequences.

When tax fraud is committed, it means that a person did not pay the taxes that they owe. When this occurs, the IRS is able to stick an individual with civil and criminal penalties. This could result in penalties such as fine and incarceration. On the other hand, tax evasion, which is similar to tax fraud, occurs when a person fails to pay any taxes or deliberately underpaid taxes through illegal measures.

Tax fraud and tax evasion are considered a felony. This means that harsh penalties could result. This matter is looked at three different ways, was it caused by negligence, civil fraud or criminal fraud. For negligence, the penalty could amount to 20 percent of the portion of the underpayment. For civil fraud, this means that the tax evasion is not considered criminal. This could result in a penalty of up to 75 percent of the underpayment. Finally, criminal fraud could result in heavy fines, imprisonment or both.

Because the consequences can be severe, it is vital for those facing these tax controversies to understand how serious the situation is. Whether it was an error, negligence or any other cause, it is important to assert a defense against these allegations to help resolve these matters and help one to avoid harsh penalties.

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White Plains Office
81 Main Street
Suite 307
White Plains, New York 10601

Phone: 914-686-7171
Fax: 914-686-0168
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East Hampton Office
17 Beverly Road
Post Office Box 2888
East Hampton, New York 11937

Phone: 631-329-7171
Fax: 631-604-6140
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726 King Street
Post Office Box 488
Chappaqua, New York 10514

Phone: 914-238-7171
Fax: 914-238-4353
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