Penalties for tax fraud on both a federal and CT state level

On Behalf of | Oct 26, 2020 | Tax Crimes

Tax fraud is the illegal and intentional act of falsifying your taxes in order to reduce what you pay. The intent is important. Simply making a mistake on your taxes is not the same. Many people make mistakes and will never face criminal charges or serious repercussions. Only when you do it on purpose does it become a criminal matter to the IRS.

If you have been so accused, you need to know not only what constitutes fraudulent activity but what potential ramifications you could face. This can help when deciding what legal action to take.

State penalties

Under Connecticut law, you may need to pay a fine of $1,000 for tax evasion. On top of that, you would still be required to pay the amount of money you failed to pay before. This makes the total bill different for everyone.

The state also has ramifications for willful tax violations. The penalty could be a fine that runs from $1,000 to $5,000. You may also face jail time that runs between one and five years.

Federal penalties

If you’re accused of fraud on the federal level — this could be along with state charges or independent of them — you could face more penalties.

For evasion, for instance, you could see federal jail time of up to five years. Fines could run from $250,000 (for an individual person) to $500,000 (for a company). You may also have to pay court costs.

For false statements or fraud on a federal level, the financial ramifications are the same as those noted above. The jail time is slightly shorter, maxing out at three years.

You can face both federal and state charges at the same time. It’s important to know exactly what you’re being accused of and where those accusations come from.

Your options

As you can see, the ramifications of tax fraud can be drastic and can have an impact on the rest of your life. You may contest that you just made an honest mistake or that the government is wrong and you never committed fraud to begin with. No matter where you stand, make sure you are well aware of your options.