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Flint, Michigan

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What are state and federal penalties for tax evasion?

Tax evasion lawyers

Tax evasion occurs when a person or company illegally evades paying their tax liability. Simply having tax debt or being slightly behind on your tax debt payments doesn't constitute tax fraud. If a person is negligent, or if the government cannot prove beyond a reasonable doubt that a crime has been committed, the penalty for failing to report income is significantly lower than the penalty for tax evasion. If you knowingly avoid paying or filing taxes, you could find yourself in big trouble.

The Michigan attorneys at Manley & Manley discuss the legal consequences of tax evasion and what factors go into proving guilt. If you're facing charges, our legal team would like to speak to you. Reach out to us to learn about your legal rights.

The legal consequences of tax evasion

Those accused of tax evasion are subject to criminal charges that carry serious penalties and fines. Penalties for tax evasion depend on whether the offense is civil or criminal. They also depend on how much tax has not been paid. For instance, the government often classifies unintentional tax fraud as a civil infraction. This occurs when an individual forgets to pay their taxes and often only results in a fine. On the other hand, the government classifies intentional tax fraud as a criminal offense.

Given that tax fraud against the IRS is a crime under federal law, the penalties for a conviction are substantial. If convicted of federal tax evasion, you could face up to five years of incarceration. Fines are up to $100,000 for individuals and $500,000 for corporations.

Before you can be convicted for tax evasion, the court must prove the following beyond a reasonable doubt (under 26 U.S.C. 7201):

  • The unpaid tax liability exists.
  • You took affirmative action to evade your tax liability.
  • There was specific intent to evade your tax obligations.

In Michigan, the penalties for tax invasion are up to five years in prison, a fine of up to $5,000, or both. These charges occur when someone commits tax fraud against the Michigan Department of Treasury.

Take your case seriously from the start

You can avoid penalties by learning what tax evasion is. Make sure you know what you can do to ensure that your tax return is valid. If you are being investigated for tax evasion or are facing charges, it's critical that you speak to an experienced Michigan white collar criminal defense lawyer as soon as possible.

Even after serving your prison sentence and paying your fines, the consequences of tax evasion can follow you for many years. For instance, you may have a difficult time finding and maintaining employment. Whether you're an individual taxpayer, a company, or a corporation, the attorneys at Manley & Manley will work tirelessly to help you build a strong legal defense.

If you are under investigation or are facing tax evasion charges, contact us online or call our law office for a free legal consultation.

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