New York Tax Evasion Laws & Charges + Statute of Limitations

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The crime of tax evasion in New York relates to any systematic and willful effort to avoid paying tax to the government through the avoidance of reporting taxes, or falsifying documents designed to report to the tax agency. Many experts suggest that hundreds of millions of dollars every year go unreported by people in the United States. Often, the majority of unreported cash in the US simply disappears as a result of unreported income that doesn’t have enough of a paper trail to be tracked by the tax agency.

Often, the case of tax evasion is far more complicated than an issue of simply failing to report your income. In fact, over the last ten years, cooperation on an international level has grown to help stop people from hiding their money in foreign banks.

Laws and Penalties

Tax evasion is a very serious crime, and it is distinct from tax avoidance, which is a term that is used to refer to the process of structuring the financial assets and investments a person collects in order to reduce their tax burden. In fact, there are some cases wherein with the help of a financial professional, people might be able to engage in tax avoidance efforts without breaking any federal laws. While it’s possible to avoid taxes at a state level, most tax evasion prosecutions focus on federal taxes. Because of this, the New York laws regarding tax evasion are similar to laws across the country.

In order to be prosecuted at a federal level, it is important that a prosecutor should be able to prove that the evasion action was done willfully, and did not happen as a result of an error or an opinion. Tax evasion often has a focus on recovering the money that is involved, and sending it to the government where it belongs. However, as a crime, tax evasion can also lead to a wide range of additional penalties. Indeed, on top of simply repaying what is owed in taxes, the law allows for a fine of up to $100,000 to be issued to individuals guilty of tax evasion, with an opportunity of imprisonment of up to five years.

Tax evasion sentences are regularly affected by external factors, such as the amount of tax avoided and the people involved. While an individual can only get a fine of up to $100,000, a corporation may receive a fine for tax evasion that extends up to $500,000. What’s more, the IRS may choose to charge a number of penalties or interest on the taxes that are owed over the time in which the individual has been evading their tax responsibilities.

Tax Evasion Defenses

In New York, there are a number of defenses available that a lawyer can use in protecting an individual against a conviction of tax evasion. For example:

  • Insufficient evidence – A legal professional might show that there is not enough proof available to show that a person deliberately neglected to pay the right amount of taxes. For instance, if you failed to file your tax return out of forgetfulness, then this will not necessarily be regarded as tax evasion.
  • Challenge to the IRS – If you can prove that the IRS made a mistake in suggesting that you have not filed the right documents or paid the right amount of tax, then again you cannot be convicted of tax evasion.
  • Mistakes – It is possible to prove that individuals simply made a mistake when filing their tax return. For example, you might argue that you were unsure about the money that you had to enter into the documents. However, it’s worth noting that you cannot simply claim that you did not know you were supposed to file a tax return in the first place.
  • Lack of intent – Finally, your lawyer can take steps to prove that the behavior you took part in as part of the alleged tax evasion action was not done with the intent to avoid paying the right amount of taxes or providing the IRS with incorrect information.

Statute of Limitations

In New York, the statute of limitations that is currently in place for an issue of tax evasion remains the same as any statute of limitation for a non-capital federal offense. At this time, the statute of limitations for non-capital federal offenses stands at five years, meaning that if any information regarding tax evasion matters is entered within the New York courts after five years has passed, it will not be regarded as a way to prosecute an individual, bring them to trial, or indeed punish them for the offense that has been alleged.

New York Tax Evasion Cases