a lawyer helping a client who committed tax evasionWhat constitutes tax evasion in North Carolina, and what are the penalties for this crime? In the most basic terms, tax evasion means intentionally avoiding paying taxes you owe.

Depending upon the specific facts of your case, you may be charged under either North Carolina state law or under federal criminal law.

Generally speaking, federal tax evasion charges carry more substantial penalties than do state tax evasion charges.

However, tax evasion charges under state and federal law are both serious and can have long-term consequences for anyone who is convicted of the offense.

Tax Evasion Under North Carolina State Law

Chapter 105 of the North Carolina General Statutes governs taxation in the state. If a taxpayer in the state of North Carolina “who, because of fraud with intent to evade tax, underpays the tax . . . is guilty of a Class H felony.”

In other words, if you know you owe income taxes to the state of North Carolina and you do something fraudulent in order to avoid paying those taxes, you can be guilty of tax evasion.

A Class H felony in North Carolina can carry a prison sentence of anywhere from 4 to 24 months in prison, but probation may be a possibility for a person who is convicted of a Class H felony.

When the conviction is specifically for evading taxes, there are also significant financial penalties. The defendant likely will owe penalties and interest for unpaid taxes in addition to the penalties for fraud and evasion.

Penalties and interest for unpaid taxes include 5 percent of the unpaid tax per month, a 10 percent late payment penalty, and a 20 percent collection assistance fee if taxes are not paid within 90 days. Penalties for fraud and evasion of taxes include a 50 percent fraud penalty on top of any other penalties and interest for unpaid taxes.

Federal Tax Evasion Charges

Federal tax evasion is defined as a situation in which “any person who willfully attempts in any manner to evade or defeat any tax.” This crime is considered a felony, and it comes with a penalty of up to $100,000 for an individual and a term of imprisonment of up to five years.

In addition, the defendant is responsible for the costs of prosecution and will have to deal with a felony record. A person can be charged with this crime under both state and federal law, depending upon the elements of the case.

Discuss Your Defense With a North Carolina Criminal Defense Lawyer

Are you facing tax evasion charges? It is extremely important to have an experienced North Carolina criminal defense lawyer on your side. As we mentioned, this crime can be considered either a state or a federal offense, and a conviction can carry significant criminal penalties.

To avoid having a serious conviction on your record and facing a term of imprisonment, you should reach out to a defense attorney as soon as possible. Don’t wait to get help. Contact Tarlton & Polk today to begin building your defense.