Sapone and Petrillo, LLP

How serious is a tax fraud charge?

On Behalf of | Aug 29, 2018 | Firm News, White Collar Crimes

Most New Yorkers could agree that filing taxes is hardly an exciting activity. Each year, as that season comes and goes, countless residents walk away having evaded tax returns in some way. Many of those who commit tax fraud are unaware that the act was committed in the first place. Regardless of intention, this type of white collar crime can come with heavy penalties, giving the process potential to linger on much longer than the tax season itself. 

Forbes shares in an article on tax fraud and the role of the IRS that even the most innocent activites can seem suspicious. For this reason, it can be helpful to note the IRS statute of limitations. Unfortunately, Forbes goes on to state that the laws surrounding tax evasion are only becoming more strict: as of 2016, the IRS has six years to audit taxes in some cases. Depending on the details of the case, the statute of limitations could go beyond the normal three-year timeframe. For instance, if one omits a portion of income or skips over certain forms, they could face penalties down the road.

As for specific penalties, New York’s state website outlines the basics. Those who are late to file taxes could see a five percent charge of the tax due for each month the return is late — reaching a maximum of 25 percent. Consequences can become even more serious when returns are over 60 days late. When it comes to the process of paying taxes, New Yorkers could see a penalty charge in addition to interest. The more severe the act, the steeper the penalties: general negligence could result in a 50 percent charge of the interest due on underpayment. Tax returns are complex enough on their own, making it all the more important to understand the challenges that could follow a misstep in this process.