Not all crimes involve violence or direct victims. Some are more subtle and involve violating basic laws, such as paying taxes.
All residents of the state must pay income tax by law. Attempting to evade taxes is a white-collar crime, and North Carolina has a robust system to identify and prosecute these violations.
State legal framework on tax offenses
Per state law, the following tax evasion actions are criminal offenses:
- Willful attempt to evade or defeat tax: People can commit this offense in various ways, such as underreporting income from side jobs, overstating charitable contributions and concealing assets.
- Willful failure to file a return, supply information, or pay tax: Tax returns are reports filed with the Internal Revenue Service (IRS) or a state-local tax collection agency to calculate one’s income tax. Willfully failing to provide this report on time is a punishable offense.
- Fraudulent and false statements: It’s a crime to knowingly use the identifying information of another (i.e., their tax return information) to obtain a benefit such as lower taxes.
Imprisonment and heavy fines await those convicted of tax evasion.
The penalties for tax evasion
The consequences of tax evasion and fraud can be severe, including:
- Willful attempt to evade or defeat tax: This is a Class H felony, which leads to up to 25 months of prison time.
- Willful failure to file a return, supply information, or pay tax: This is a Class 1 misdemeanor, which carries up to 120 days in jail. The convicted might also have to pay a court-determined fine.
- Fraudulent and false statements: This is a Class G felony with up to two years of imprisonment. If the person whose identifying information was used suffers any financial impact due to the offense, it becomes a Class F felony instead. A Class F felony carries up to 41 months of prison time.
On top of these penalties, the North Carolina Department of Revenue can assess a financial penalty against the convicted person equal to 50% of the total deficiency.
Tax evasion isn’t a victimless crime since an offense hurts all honest taxpayers. If you suspect you may have committed a tax-related offense or if you’re facing charges, consider seeking a legal professional who can help you navigate the court process.