Tax fraud is the intentional underpayment of tax obligations and is subject to both civil and criminal penalties at the state and local levels. The consequences for this offense are severe and often involve large fines and prison terms. If you are being charged with this crime, a Hennepin County tax fraud attorney could examine your case and provide legal guidance that could help you reduce or eliminate your charges.

Examples of Tax Fraud

Examples of tax fraud that commonly result in criminal charges include:

  • Unreported or understated income
  • Concealment of assets
  • Failure to file a tax return
  • Dealing in cash to avoid reporting
  • Fraudulent deductions and tax credits

For each of these behaviors to constitute tax fraud, it is necessary for the person being charged to have intentionally violated the law. A Hennepin County attorney knowledgeable about the required elements of a tax fraud allegation could provide valuable help to an individual responding to tax fraud charges.

Tax Fraud Law and Penalties

Tax fraud is subject to penalties under both federal and state law. Federal law defines three major types of tax fraud crimes with accompanying penalties.

Tax Evasion

A person commits tax evasion when they knowingly and willfully underreport their income with the intent of evading tax payment. This would include failing to file a tax return if they knew they had an obligation to file and intentionally failed to do so. Maximum penalties for tax evasion include a five-year prison sentence, a $100,000 fine for individuals, a $500,000 fine for corporations, and legal fees.

False Statements on Income Tax Returns

Under federal law, a person can be held criminally liable for making false statements on income tax returns if they knowingly and willfully sign and submit a tax return containing “material” false statements. False statements are considered material if they could influence an I.R.S. investigation or audit. The statement is considered willful if the person intentionally violated their duty to report truthful information.

Maximum penalties for false statements under this provision include a three-year prison sentence, a $100,000 fine for individuals and $500,000 for corporations, plus legal fees.

Aiding or Assisting in Preparation of False Documents

A person may be found guilty of aiding or assisting in the preparation of false documents under I.R.S. laws if they willfully assisted in the preparation of a tax return that contains material false statements, including material omissions from tax documents. Acting on a mistaken belief, misunderstanding, or misinformation does not constitute a willful act.

Maximum penalties for this violation include a three-year prison sentence, a $100,000 fine for individuals, and a $500,000 fine for corporations, plus legal fees.

Minnesota Tax Fraud Law

Penalties for tax fraud in the state include 50% of any unpaid state income or property tax. An experienced lawyer in Hennepin County could further explain the ramifications for this category of tax fraud offense and how cases of this nature are typically handled in the local court system.

A Hennepin County Tax Fraud Attorney Could Be Your  Legal Advocate

Penalties for a tax fraud conviction can include prison time, stiff fees, and property forfeiture if you are proven to have deliberately tried to underpay or misrepresent your tax obligations. It is important to distinguish between legal, strategic tax avoidance, and criminal fraud when facing charges.

A Hennepin County tax fraud lawyer could help you understand the precise nature of the charges against you and whether they are fully supported by the prosecution’s evidence. It could be crucial to have a skilled and experienced tax fraud attorney on your team. Contact us today to learn more.