Is Tax Evasion a Felony in New Jersey? 

Raise your hand if you enjoy paying taxes? You didn’t raise your hand, did you? Paying taxes isn’t fun, but evading taxes can lead to some very hefty fines–especially in New Jersey. Keep reading to learn what tax evasion is, how to avoid it, and how to seek help if you’re accused of it. 

Tax Evasion 

First and foremost, tax evasion is illegal. Defined by the IRS (Internal Revenue Service), tax evasion is the failure to pay or deliberate underpayment of taxes. Tax evasion is often mistaken for tax avoidance, which is actually a legal way to avoid paying some taxes. 

The difference between tax evasion and tax avoidance is that tax avoidance is using deductions, credits, and other legal means to lower your tax bill. Conversely, tax evasion means illegally lowering your tax bill by deliberately failing to report all or some of your income. 

Some examples of tax evasion include: 

  • Hiding money in unidentifiable accounts
  • Lying about the amount or source of income
  • Falsely claiming dependents 
  • Overstating business expenses 

These money-making activities can lead to serious consequences for those involved. The IRS and the New Jersey Division of Taxation are watchful and aggressive in going after tax-evaders. These authorities use many methods to detect suspicious activities and inconsistencies with tax filings. 

If you’re accused of tax evasion in New Jersey, you’re facing penalties that can be life changing. Seeking the assistance of a qualified, experienced legal professional is the best way to avoid punishment. 

Penalties for Tax Evasion in New Jersey 

The penalties for a tax evasion conviction in New Jersey vary depending on the amount of money/taxes involved. However, any penalty assessed for tax evasion in New Jersey will undoubtedly be harsh. Potential consequences for a tax evasion conviction in New Jersey include: 

Fines and Restitution: Up to $100,000 for each tax evasion conviction. In addition to that, you may be sentenced to pay restitution for the unpaid taxes and any interest accrued. 

Up to 5 Years in Prison: This is the maximum sentence per count of tax evasion. If you’re convicted of more than one count, the sentences will be imposed consecutively. 

Probation: Most tax evasion convictions include years of probation after you are released from jail/prison. 

Damaged Reputation: A conviction of tax evasion can damage your personal and professional reputation, making it hard to gain employment in the future. Some convictions are published by the media or government, making it even more difficult to live an average life once you’ve paid your debt to society. 

The penalties are severe for a tax evasion conviction and they are long-lasting. The impact on your personal and professional life is huge. 

How To Avoid Tax Evasion 

Not everyone who commits tax evasion is deliberately committing it. Some people find themselves in situations where they fail to comply with tax codes. Whether you failed to file a tax return, pay due taxes, or misreported income, the IRS needs to prove that you did so knowingly. 

The burden of truth falls on the IRS to prove that you had intent to commit tax evasion, mistakes can happen. The IRS understands this and as long as you pay what’s due, or make an attempt to pay what’s due, a conviction for tax evasion is unlikely. 

Some simple ways to ensure you do not commit tax evasion include: 

  1. Making sure you have the correct tax forms 
  2. Confirming all information on the tax forms is correct; triple check
  3. Checking any deductions/credits for validity 
  4. Reporting your income accurately 

Keeping these things in mind when it comes to filing your tax returns can help you avoid negligently committing tax evasion. 

What To Do if You’ve Been Charged with Tax Evasion 

As discussed, the consequences for committing tax evasion are severe and life altering. However, your intent to commit the crime must be proven. Defending yourself against the IRS in the face of a tax evasion charge is not advisable, enlisting the assistance of a qualified tax attorney is. 

Having a skilled and knowledgeable attorney on your side when facing tax evasion charges is necessary. A seasoned attorney will know how to assess your case and craft a defense to fit your specific needs. The team at the Law Offices of Robert J. DeGroot is ready to provide you with a sound defense against tax evasion charges, just as we’ve done for over 40 years. 

If you’re facing tax evasion charges, do not hesitate to contact the Law Offices of Robert J. DeGroot for sound legal advice and assistance. Contact us today!