As a resident of Minnesota, it is imperative that you pay both your federal and state tax obligations in a timely manner. If you fail to pay your tax on time, you could be hit with significant financial penalties. That being said, being unable to pay your taxes is not a criminal offense.
In contrast, tax evasion—an illegal attempt to avoid tax liability—is a very serious criminal offense. You could face felony charges under federal law or state law. Below, our Mankato criminal defense attorney highlights the key things to know about federal and state tax fraud charges in Minnesota.
What to Know About Tax Evasion in Minnesota
It is important to distinguish between inability to pay and unwillingness to pay. Failure to pay your taxes in a timely manner is not sufficient to establish criminal tax evasion. Prosecutors in a criminal tax evasion case must prove some intentional effort to “defeat’ tax liability. Here is a more in depth explanation of federal and state tax evasion charges:
- Federal Tax Evasion: Federal tax evasion charges fall under Internal Revenue Code (IRC) § 720. Under this section of federal law, it is strictly unlawful to make a willful attempt to “evade” or “defeat” the payment of a valid federal tax. In other words, federal tax evasion occurs when a person takes intentional action to try to pay less in federal tax than they actually owe under the law. It is a serious felony offense. If you are convicted of federal tax evasion as an individual, you can be held liable for the full amount you should have paid, plus interest and fees.
- Minnesota State Tax Evasion: Minnesota also has its own state-level tax evasion law. The statute shares many important similarities with the federal tax evasion law. Under Sec. 289A.63 MN, a person commits the offense of criminal tax evasion when they willfully try to pay less than they owe—either by failing to file or filing false information. Tax evasion is a felony offense under Minnesota state law. In Minnesota, felony tax evasion is punishable by a 50 percent surcharge penalty on tax liability, civil financial penalties, and a maximum of five years in state prison.
Tax evasion charges must be taken seriously. A conviction on a criminal tax evasion charge carries stiff financial penalties and the potential for significant jail time. Proactive legal representation is a must. An experienced Minnesota white collar defense lawyer can review the specific circumstances of your case and help you devise a comprehensive defense strategy.
Contact Our Southern Minnesota Criminal Defense Attorneys Today
At Kohlmeyer Hagen, Law Office Chtd., our Minnesota criminal defense lawyers are strong, effective advocates for justice. If you or your loved one is facing tax fraud charges, we are here to help. Give us a call or use our online contact form for a completely confidential appointment with an attorney. With law offices in Mankato and Rochester, we serve communities throughout Southern Minnesota.