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Last Updated on: 15th August 2023, 12:29 am
New York Tax Law and Criminal Tax Fraud
New York’s voluminous tax code includes a number of different criminal provisions in addition to civil penalties that can be levied against those who refuse to comply. One of the most commonly charged crimes is criminal tax fraud in the fifth degree. Included in New York Tax Law section 1802, criminal tax fraud in the fifth degree occurs when a person commits a criminal tax fraud act. Given that there are five degrees of tax crimes under New York law, this is the least serious. That doesn’t mean that defendants are in the clear, though. Tax fraud in any degree has serious consequences. Those accused should find a good lawyer.
Statutory Language for Fifth Degree Tax Fraud
Criminal tax fraud in the fifth degree has a simple definition with more complicated consequences. The law simply states that a person commits this crime at this level when he or she commits a tax fraud act. The code provides many examples of things that constitute a tax fraud act. Failing to sign any writing required by the tax code or causing another person to fail to sign a writing is a fraudulent act. Falsely signing any tax document with an intent to defraud the state is a fraudulent act. These may seem like “process” crimes, but they are intended to keep people from abusing the self-reporting system that underpins the tax system.
In addition to the prohibitions against problems in reporting, tax fraud in the fifth degree also covers engaging in any scheme designed to defraud the state of any revenue which it is due. Failing to pay any tax that is due also qualifies as a tax fraud act. The statute is necessarily broad so that it can cover a huge amount of wrongful conduct. Some consider it to be a catch-all that can be used to criminalize conduct that goes against the spirit of the tax code and the state’s tax collection scheme.
Liability for Third Parties
One of the most important elements of criminal tax fraud in the fifth degree is the liability it places on third parties. In addition to holding responsible those who make material false statements and fail to live up to their duties under the law, it makes it illegal to assist another or direct another in doing so. Ideally, this puts the onus on lawyers, accounting professionals, and tax advisers who fail in their duty and push unlawful conduct. The law thus becomes something of a backstop to encourage professionals to be both vigilant and careful in their advisement and reporting.
Requirement of Knowing Conduct
New York state law is designed to punish not accidental conduct, but knowing or intentional conduct. People who accidentally misrepresent or omit information are not liable under this statute. The state must prove that the person who committed the act did so with knowledge of its falsity or with an intent to defraud. Errors that are truly accidental are not covered under this statute, though individuals charged will likely need to scramble to show that their conduct was unknowing.
Punishment for Tax Fraud in the Fifth Degree
As a fifth degree crime, this level of tax fraud carries lower penalties than other more serious levels. People who engage in long-term, ongoing tax fraud that robs the state of large quantities of money are likely to be charged with more serious versions of this crime. Those charged with fifth degree fraud face misdemeanor punishment. This means that the maximum period of incarceration is one year rather than the multi-year or decade prison sentences that might go along with a more serious form of fraud. Still, time spent in jail and a potential fine are serious enough punishments that those accused of fifth degree tax fraud should consult a skilled attorney to defend them in the case.
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Criminal tax fraud in the fifth degree is a serious crime under the New York State Penal Code 1802. As a class A misdemeanor, a conviction of this violation carries a penalty of up to one year in jail or a three-year probationary term. Additionally, an individual convicted of fifth degree tax fraud may also be required to pay a fine of up to $1,000 or equivalent to twice the amount of the monetary gain represented by the crime.
The Basics of Fifth Degree criminal Tax Fraud
New York law requires that an individual willingly fails to “make, render, sign, certify, or file” documents related to income tax returns, or reports required to be filed under the law. Additionally, the same conditions apply in instances where the individual causes another to willingly violate the terms of the criminal tax fraud act.
A second condition of this act also establishes that knowledge of false or misleading statements or information is also a factor in establishing tax fraud. This includes omitting information on documents filed with any state office or representative in relation to the filing of returns and reports. Similarly, a third condition gives greater clarification by establishing the supply of any false or fraudulent information given on a return, audit, or investigation may constitute another charge of criminal tax fraud. The law also provides for the act of scheming to defraud the government at any level through deception for the purposes of profit or avoiding the payment of taxes.
Following these conditions, New York State Penal Code 1802 also covers the collection of taxes and failure to pay as a condition of tax fraud. Where an individual is required to remit payment to the state, or a representative or office of that state, the individual is also guilty of tax fraud. By failure to pay, the state may choose to prove an intent to evade paying taxes, which establishes a separate count of the law.
Finally, the criminal tax fraud law in New York State also establishes that claiming an exemption, where none exists, is also an element of tax fraud. To prove this condition, however, the state must be able to show you filed for an exemption for which you knew you did not qualify. In such a case, the state may seek to show that you either omitted information or supplied misleading or false information in order to qualify for the exemption.
Defending Against criminal Tax Fraud
When it comes to tax fraud charges, the severity of the charge determines your penalty, which may constitute a combination of jail time and monetary fines. The initial charge may be criminal tax fraud in the fifth degree, but the prosecution may look for ways to elevate the charges to a more serious crime, or may even file multiple charges against you. What started out as a one-year jail sentence can end up costing you 25 years in state prison.
In circumstances where there are four reporting periods within a year and, for each period, you withheld under $3,000, the fifth degree criminal tax fraud violation will likely remain, but more ambitious prosecutors may employ tactics to raise the stakes in your case. For example, criminal codes in New York permit the prosecutor to take the total sum of your violations, $12,000 in this case, to apply a third degree criminal tax fraud charge. In so doing, the district attorney can ask for a prison term up to seven years.
additionally, the state can add other charges, such as Grand Larceny and criminal Possession of Stolen Property, dependent upon the specific circumstances of your case. Even where those charges can’t be applied, the district attorney may pursue charges of forgery and the falsification of documents. In most cases, the prosecution will add some additional charges to the initial fifth degree criminal tax fraud charge.
In consulting an experienced attorney to help defend you against charges that you have violated New York State Penal Code 1802, it’s important to provide the lawyer with as much documentation as you can provide. Additionally, add any details that might provide corroboration for your defense, including witnesses or other evidence. By supplying your attorney with as much evidence and details as you have, he can better analyze the merits of your case and determine your best course of action. Even where the attorney may not be able to secure a dismissal of the charges or an acquittal, he may be able to get you a reduced sentence. There are a number of ways a defense attorney can benefit your case, beyond what you might be able to accomplish without a legal advocate. For that reason, it’s inadvisable for you to try to represent yourself. The prosecutor will have a wealth of experience and legal knowledge at his disposal. By enlisting a knowledgeable defense attorney, you can level the playing field.