Steps to Take if You Have Been Charged With Tax Evasion in North Carolina

As taxpayers in North Carolina, it is essential to understand the difference between tax evasion and tax fraud. These criminal charges should be taken seriously but have different elements and consequences. Tax fraud and tax evasion are often used interchangeably but are distinct crimes. Understanding what you are charged with, the penalties you face, and the elements that prosecutors need to prove to convict you of the crime can help you make informed decisions about your legal defense strategy with the help of your attorney.

Critical Differences Between Tax Evasion and Tax Fraud

The crime of tax fraud involves intentionally submitting false information on a tax return. Common examples of tax fraud include:

  • Claiming false deductions or credits.
  • Failing to report all income.
  • Using false Social Security numbers.

Tax fraud is a criminal offense punishable by imprisonment, fines, and other penalties. In North Carolina, tax fraud is classified as a class H felony with a maximum prison sentence of 25 years. On the other hand, tax evasion involves failing to pay the total amount of taxes a person owes.

Tax evasion is a serious offense that takes place when an individual fails to report all of their taxable income or conceals assets or earnings. While tax evasion is not as severe as tax fraud, it still carries significant penalties. In North Carolina, tax evasion is classified as a Class 1 felony, with a maximum prison sentence of 15 years.

The main difference between tax evasion and tax fraud lies in the intent behind the act. Prosecutors need to prove a deliberate act of dishonesty to prove that tax fraud occurred. On the other hand, prosecutors only need to show that a person was negligent to prove tax evasion. Forgetting to report certain types of income is enough for a prosecutor to convict a person of tax evasion. Another critical difference is the types of evidence required for a conviction.

In a tax fraud case, the government must prove that the taxpayer knowingly and intentionally submitted false information on their tax return. The prosecution must show a clear pattern of fraud, such as submitting multiple false tax returns over time. In tax evasion cases, the government has to prove that the taxpayer could pay the taxes owed but deliberately chose not to. This element can be difficult for prosecutors to prove and may require the assistance of financial records, expert witnesses, and other substantial evidence.

Level the Playing Field By Discussing Your Case With a Skilled Attorney

The North Carolina Department of Revenue and the IRS have extensive resources at their disposal. They have the time, money, and personnel to investigate tax fraud and tax evasion cases. Citizens need to have the type of money and time that these massive institutions have. As a result, innocent citizens can be charged and convicted of tax fraud and tax evasion. Hiring an experienced criminal defense attorney can help you level the playing field against these powerful institutions.

These agencies have the legal authority to access a person's bank records, employment records, and other financial information. They can use this information to build a case against a taxpayer suspected of committing tax-related crimes. In some cases, citizens only realize they are being investigated once the agencies have already gathered significant information.

If you are facing tax evasion or tax fraud charges, it can be tempting to put off taking action. You can do nothing to protect yourself from these powerful institutions. On the contrary, you can protect yourself and level the playing field by hiring an experienced criminal defense attorney. A skilled attorney can help you understand the nature of the charges against you.

They can also access the types of evidence the government has against you and begin developing a legal strategy to defend you. When defendants have hired an experienced attorney, it is more difficult for agencies to convict a defendant. When criminal defense attorneys protect defendants, agencies will be less likely to try to take advantage of them and abuse their rights.

Contact a Skilled Criminal Defense Attorney

It may be possible to negotiate a plea bargain or for your attorney to successfully reach a settlement with the government to reduce the charges against you or the penalties you face. It may be necessary in other cases to go to trial and defend yourself against the charges. Regardless of the specific circumstances of your case, it is crucial to have a knowledgeable criminal defense attorney on your side. Do not hesitate to contact Arnold & Smith, PLLC, to schedule a complimentary case evaluation and learn how we can fight for you.