Tuesday, April 18 is Tax Day for 2017.  This is the last day (without an extension) to file your 2016 taxes.  As a warning of what happens when you fail to file, or intentionally evade taxes, we will look at the recent charges against “The Jersey Shore” star, Mike “The Situation” Sorrentino.

Back in 2014, both The Situation and his brother, Marc Sorrentino, were charged with filing false tax returns and conspiracy to defraud the United States.  This month, US Attorneys for New Jersey filed additional charges in a 22-page indictment.

If you or a loved one is facing tax charges in New Jersey, it is very important to get an experienced criminal defense attorney on your side.  The Law Offices of John J. Zarych have attorneys with real experience in federal criminal cases, and they might be able to help you avoid serious punishments in tax cases.

Tax Evasion and Failure to File Charges

No matter how much income you have, the federal government requires you to file your taxes every year.  Failing to file your taxes is actually a crime under 26 U.S.C. § 7206.  Title 26 of the U.S. Code is the Internal Revenue Code, and gives all the rules for how taxes work and lists US tax crimes.  Typically, only lawyers and accountants have a good grasp of the Code, but everyone should understand a few things about these tax crimes.

Failure to File

Failure to file, under § 7206, must be a “willful” failure to file.  No definition of a crime is complete without a mental state requirement, meaning you must “willfully” fail to file your taxes to commit a crime.  Accidentally forgetting, or missing the deadline should not constitute a crime, but may have other tax penalties.

If you are convicted for failure to file, you could face up to $25,000 in fines and a year in prison.  Corporations can also be charged with failure to file, even though they are not flesh-and-blood people.  If a corporation fails to file, it can be charged up to $100,000 in fines, instead.

Tax Evasion

Tax evasion, under 26 U.S.C. § 7201 requires more intentional action than failure to file.  While failure to file can be any willful non-action in filing your taxes, tax evasion needs to have something extra.  Merely failing to file is not enough to also be charged with tax evasion.  Instead, things like lying, hiding money, falsifying records, or other bad actions are required to be convicted of tax evasion.

Tax evasion can be punished with up to $100,000 in fines and up to five years in federal prison.  For a corporation, the fine is up to $500,000.

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Tax Fraud and Conspiracy to Defraud the US

Besides tax evasion and failure to file, there are a few other crimes under the umbrella of “fraud.”  Fraud is often simply a legal name for lying.  It can come into play in a few different situations under the law.

Tax Fraud

The first, with regard to taxes, is “tax fraud.”  Like failure to file and tax evasion, tax fraud is a crime under the Internal Revenue Code.  26 U.S.C. § 7206 makes it illegal to commit fraud in five different ways:

  1. Making false statements on tax returns or other documents;
  2. Helping someone else submit false returns or documents;
  3. Using false bonds, permits, or other documents required by the IRS;
  4. Moving goods to avoid taxes; or
  5. Hiding real estate or changing records to hide real estate transactions.

The most common ways that these come up in tax fraud cases is for lies on a tax return (or other tax document), or the hiding of money.  This is a felony with a potential punishment of three years in prison and up to $100,000 in fines (or $500,000 for a corporation).

Conspiracy to Defraud the US

There is another crime of fraud in taxation, called “conspiracy to defraud the United States.”  This is listed under 18 U.S.C. § 371 as part of the regular criminal code, so it can apply to other lies to the US Government, even outside of taxation.  This crime is simply defined as any instance where two (or more) people conspire to defraud the US.  This covers any lies used to gain a benefit.  That could mean lies to get tax breaks, or lies to other government agencies.  The maximum penalty for conspiracy to defraud the US is five years in prison, plus a fine.

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Tax Crime Defense Attorneys in New Jersey

Any of these crimes are very serious federal offenses.  Unlike state charges, federal charges are often more serious, with few options for punishments lower than one year, and no options for parole.  If you’re in a situation like Mike Sorrentino’s, call The Law Offices of John J. Zarych today.  For a free, confidential consultation, call (609) 616-4956 today.