Can You Go to Jail for Not Paying Your Taxes?

Fear of civil or criminal penalties is one of the main motivators the government uses to get people to pay their taxes. But if you fail to pay your taxes, or you make a mistake and underreport your income, what kind of penalties could you face? Could you really go to jail for not paying your taxes?

The short answer is: Yes. Jail and steep fines are a possibility if you’re found guilty of tax evasion. The criminal defense lawyers at Kurtz & Blum are here to answer any questions you may have about tax evasion and related crimes in North Carolina. Keep reading to learn more.

What Is Tax Evasion?

At the most basic level, tax evasion is the crime of cheating on your taxes in some way. There are various ways that a person may commit tax evasion, such as:

  • Failing to file tax returns
  • Hiding income streams
  • Underreporting income
  • Making an underpayment of estimated income tax
  • Claiming credits or deductions you don’t qualify for
  • Hiding a tax deficiency in some other way

While the Internal Revenue Service (IRS) will give most taxpayers the benefit of the doubt if they find an error, if you show signs of trying to commit fraud, you could face a civil or criminal investigation.

Can You Go to Jail for Tax Evasion in North Carolina?

The likelihood of you being sentenced to jail for tax evasion depends on the facts of your case. The IRS refers cases of minor tax evasion or unintentional mistakes to its civil division. In these cases, you’ll generally only face financial penalties, such as additional tax penalties.

However, if the IRS suspects you of intentionally trying to defraud them, your case could be referred for criminal prosecution, in which case you could be sentenced to jail or prison.

Penalties for Tax Evasion in North Carolina

If you make an accidental mistake on your taxes, you’ll generally face civil penalties.

According to the North Carolina Department of Revenue, the penalty for filing a tax return after the due date is five percent of whatever taxes you owe per month or part of the month the return is late. The penalty for failing to pay your taxes on time is ten percent of whatever taxes are not paid by the original due date. In cases where more than 25 percent or more of your income is understated, you could face a penalty of 25 percent or more of whatever taxes you owed.

The criminal penalties for tax evasion are much steeper. A single count of tax evasion can result in five years in prison under federal law. You could also face up to $250,000 in fines.

Our Raleigh Criminal Defense Attorneys Can Help

If you’ve been accused of tax evasion by the state or IRS, it’s important to speak to a North Carolina tax lawyer as soon as possible. As we have explained above, tax evasion can result in significant penalties, including possible incarceration. Our criminal defense lawyer at Kurtz & Blum have more than 50 years of combined legal experience handling these sorts of issues. When you retain our services, you get the whole team. We will put together a strong defense based on the specifics of your case.

Don’t wait to speak to an attorney if you’re facing tax evasion charges. Get a confidential case review by visiting our contact page or calling our office in Raleigh. We’re in your corner.

Seth A. Blum is a graduate of Tufts University and Duke Law School. He also holds a Master’s Degree from the Terry Sanford Institute of Public Policy Studies. Seth is an experienced trial attorney who is licensed and has tried cases in both North Carolina State and Federal Courts. Seth is an Adjunct Professor of Trial Advocacy at the University of North Carolina School of Law. He regularly teaches other lawyers advanced trial techniques.