Most Tennessee residents have heard about cases in which people are prosecuted for some type of tax fraud. However, news stories do not always provide a lot of details as to what exactly this means. The fact is that there are multiple types of tax fraud charges people can face, each with its own set of penalties.
One type of tax fraud charge often referenced is tax evasion. As explained by the Internal Revenue Service, this is different than failing to pay taxes although both may result in criminal charges. The latter involves no active role on the part of a defendant but is simply the lack of submitting payment for taxes due. While classified as a misdemeanor, it may be punishable by time in prison, high fines or both. The failure to file a tax return at all may also result in this type of misdemeanor charge.
Tax evasion does also involve the failure to pay taxes. However, this differs from the above in that it involves conscious actions taken on the part of a defendant in order to avoid paying any due taxes. Examples of such actions include hiding assets, repeatedly overstating deductions, lying on tax returns so that tax assessments are lower, or even moving corporate assets around in a way that reduces personal tax burden. This is a felony charge. It can be easier than many people think to be accused of tax evasion.
This information is not meant to be legal advice but is intended to give people an overview of some types of tax fraud charges in Tennessee.
