The old saying is that the only two things that are certain in life are death and taxes. But if you have not been paying your taxes as you should, or if you have been receiving money under the table for work and not claiming it on your tax return, you may be putting yourself at a high risk.
Many people think that "fudging" a bit on their tax return does not do any harm. The truth is that tax evasion is a serious crime, and if the authorities catch you evading your taxes, the penalties can be steep.
What counts as tax evasion?
The definition of tax evasion is broad, which is why you should not take chances if you have knowingly filed misleading information on your tax returns or have failed to file your tax returns for a number of years. According to the Cornell Law School Legal Information Institute, tax evasion is "using illegal means to avoid paying taxes." This can run the gamut of a range of different ways of misrepresenting your income and assets to avoid paying the taxes due. For example, underreporting your income, or stating that you made less than you actually did, is one common type of tax evasion. Another way is by "hiding" money in offshore accounts. Yet another is by improperly taking deductions that you are not entitled to, or taking higher deductions than you are actually entitled to.
Is tax evasion a crime?
The simple answer to that question is: yes, tax evasion is a crime. Failure to file a 1040 is a misdemeanor under federal law. And if you commit what authorities deem an "overt act of evasion," it can be a felony offense. If you have already engaged in this type of tax evasion, you should know that you may be at risk for serious criminal charges.
If authorities have already charged you with tax evasion, you should consult with an attorney who has experience defending clients with tax fraud cases. The stakes are high, and it is important to have a legal professional who understands exactly how the system in New York state works in order to assist you in crafting an effective defense strategy.