North Carolina and Federal Tax Fraud

Being charged with tax fraud is a serious offense that can result in stiff financial and criminal penalties ranging from less than a year in prison and a fine of $100,000 to up to 5 years in prison and a $250,000 fine. Criminal tax prosecutions are on the rise in North Carolina as well as nationally, and it is important that you have an experienced criminal tax attorney on your side.

Crimes often connected to tax fraud offenses include Ponzi schemes, embezzlement, tax evasion, failing to pay taxes, underreporting of income and money laundering. Although prosecutors have discretion in determining which cases to pursue, and victims may also seek redress in civil court, tax fraud includes any of the following offenses:

Tax Evasion. This offense includes any attempt to evade or defeat tax. The federal and North Carolina definitions are similar with the penalties varying, but in both cases the crime is charged as a felony. According to the IRS, tax evasion is committed by “any person who willfully attempts in any manner to evade or defeat any tax imposed by [federal tax laws]. The North Carolina statute also charges an individual who “aids or abets any person to attempt” to evade taxes. There is also the potential for being charged with tax evasion when using a “shelter” in which the IRS believes there to be no legitimate purpose other than to evade taxes. The use of foreign bank accounts can also be seen as tax evasion offenses if not reported properly.
Failure to File Tax Returns. The willful failure to file a tax return, supply information, or pay tax is a criminal offense. Violations include: 1) willful failure to file a required return; 2) willful failure to pay an estimated tax; 3) willful failure to pay tax; 4) willful failure to keep records; and 5) willful failure to furnish information.
Filing a False Tax Return. This offense is committed when a taxpayer has made, signed and filed a false tax return or other document. In the state of North Carolina “any person, pursuant to or in connection with the revenue laws, who willfully aids, assists in, procures, counsels, or advises the preparation, presentation, or filing of a return, affidavit, claim, or any other document that the person knows is fraudulent or false as to any material matter, whether or not the falsity or fraud is with the knowledge or consent of the person authorized or required to present or file the return, affidavit, claim, or other document, is guilty of a felony.”
Tax Preparer Violations. Tax preparers can be held liable for knowingly filing false returns for their clients. It is a crime in the state of North Carolina and with the federal government to willfully aid, assist, procure, counsel or advise in the preparation or presentation of a false return or document. The statute is often utilized when a return preparer, accountant or attorney assists in the preparation of a false income tax return.

At the national level the IRS focuses its investigations on tax evasion, false tax returns, and failure to file tax returns. The IRS’ North Carolina counterparts at the North Carolina Department of Revenue investigate similar cases as well as failure to file and pay sales and use taxes and employee withholding taxes.

Contact a Tax Attorney Today

For over 25 years, tax attorney Douglas E. Kingsbery, listed among the Best Lawyers in America, and named one of North Carolina’s “Legal Elite” by North Carolina Business Magazine, has been successfully representing business owners, the self-employed, and individuals residing in North Carolina, including Raleigh, Durham, Chapel Hill, Apex, Cary, Chatham County, Orange County, Johnston County and Wake County.