Although federal tax crimes are serious matters, state tax authorities can prosecute state tax crimes aggressively as well. The state of New Jersey is no exception. Convictions for tax fraud and tax evasion in New Jersey can have dire consequences. When a taxpayer is accused of such conduct, a New Jersey tax attorney is essential to defend the taxpayer’s rights.
What is New Jersey Tax Fraud or Tax Evasion?
Fraud generally refers to a knowingly false representation that is material to the transaction. Tax fraud specifically refers to a taxpayer making a misrepresentation about their tax liability to a taxing authority. Any intentional misstatement of income, deductions, or credits could be considered tax fraud.
Tax evasion, on the other hand, refers to paying less than your legal tax liability. New Jersey also defines failure to file as a form of tax fraud. Accordingly, all of these actions - failure to file, filing a fraudulent return, or failing to pay taxes owed - fall under the umbrella definition of New Jersey tax fraud.
Examples of New Jersey Tax Fraud
The New Jersey Treasury Office of Criminal Investigation conducts investigations of suspected criminal violations of state tax laws. The following are several examples of conduct that this office considers criminal tax fraud:
- Failure to file New Jersey tax returns
- Failure to report all income
- Understating business income or overstating business expenses
- New Jersey residents claiming to be residents of other states
- Opening or closing a new business to evade taxes
- Filing a state tax return that is fraudulent in any way
- Failure to turn over taxes that have been collected or withheld, such as sales tax or payroll taxes
- Violations of Cigarette Tax Act, including counterfeit tax stamps and unlawful possession, sale, or transportation
Penalties for Tax Fraud & Evasion
The criminal penalties will vary greatly for different types of New Jersey income tax fraud or evasion. The following are some primary examples:
- Tax Evasion: Tax evasion is considered a felony. A conviction is punishable by up to five years in prison and a maximum fine of $100,000.
- Failure to File a Tax Return: If a person fails to file in a year when they owe taxes, it is considered a misdemeanor. A conviction is punishable by up to one year of imprisonment and a maximum fine of $25,000.
- Filing a False Return: It is important to distinguish between the intentional and unintentional filing of a false return. An unintentional error in a tax return, such as a mistake uncovered in an audit, is not considered criminal. On the other hand, intentional filing of a false return is a felony. Felony false filing is punishable by up to three years in prison and a fine of up to $100,000.
Thorn Law Group | Hire a New Jersey Tax Attorney to Defend Against Tax Fraud Charges
If you are facing charges or potential criminal liability for New Jersey tax fraud, speak with a New Jersey tax attorney at the Thorn Law Group immediately. To schedule a consultation, contact Kevin E. Thorn, Managing Partner, at 201-355-8202, or email him at ket@thornlawgroup.com.
