Spodek Law Group

Criminal Tax Fraud in the Third Degree: NY Tax Law 1804

Each year, New York residents or those who did business in the state are required to file an income tax return. If an individual or business provides false information on a form or otherwise takes action to defraud the state, the perpetrator of such an act may face felony charges. This may result in a state prison sentence and other penalties if convicted.

Did You Intend to Defraud the State?

It is important to mention that a prosecutor would have to show that you intended to commit fraud when you filed a tax return that was materially false. If you simply made a mistake during filing or otherwise made a good faith effort to pay taxes owed, no tax fraud has occurred. However, this doesn’t mean that you wouldn’t be subject to financial or other penalties. In some cases, a prosecutor may have enough evidence to charge you with other crimes related to your tax return or other conduct uncovered during an investigation.

What Qualifies as Tax Fraud in the Third Degree?

To qualify as tax fraud in the third degree, the state of New York must have been defrauded out of an amount between $10,000 and $50,000. For instance, you could have said that you only owed $10,000 in state tax when you actually owed $20,000 in a given tax year. This could be done by intentionally failing to report income or by exaggerating the value of a tax credit or other deduction.

What Are the Penalties for This Charge?

If you are convicted of this charge, you could face up to seven years in state prison. Those who have been convicted of a felony in the past could face a mandatory minimum of between two and four years in prison. In addition to spending time in state prison, it may also be possible to lose professional licenses.

Specifically, those who have teaching licenses or belong to the state bar could have their licenses suspended or revoked. This means that you would no longer be able to teach in most New York schools or practice law. If you are disbarred in one state, it may make it harder to pursue your career in other states. At the very least, you could have a credibility issue to overcome when applying for jobs or seeking out clients.

How Could An Attorney Help You?

If you have been sent a notice by the New York state tax authority or from any other investigative branch, you should contact an attorney immediately. In some cases, the investigation could be based on an error in judgment or an error in fact. It is not uncommon for a tax audit or other type of investigation to reveal that you missed a deduction or are otherwise entitled to a larger refund.

An attorney may be able to review your tax records to determine if you have broken the law. If you have, it may be possible to start negotiating a plea deal that may reduce the charge and the penalty that you face. If the evidence suggests that you have not committed a crime, an attorney may work to get the charge thrown out or help you win an acquittal at trial.

What About Your Tax Liability?

You are required to pay tax on income earned in the state minus any legitimate deductions or credits. Therefore, if an investigation reveals that you owe the state money, you will have to pay it in addition to any other penalties that you receive. If you don’t think that you can pay some or all of the past due obligation immediately, it may be possible to go on a payment plan. In some cases, the debt may be forgiven if it creates an extreme hardship. However, it generally cannot be wiped out in bankruptcy regardless of the type that you file for.

If you have been charged with tax fraud, you should not ignore the accusation. It could come with serious financial, personal and professional consequences. While you want to cooperate with authorities as much as possible, make sure that you do so with the help of an attorney. He or she may be able to obtain a favorable outcome in your case whatever it may be.