The New Jersey Division of Criminal Justice has created an Economic Crime Bureau that often operates in conjunction with the Department of Human Services and the Taxation Division. Their role is to uncover fraudulent activity among those who are seeking to derive some financial benefit from public and governmental agencies or programs. Often they investigate cases associated with insurance, tax, or securities fraud.
The New Jersey Department of Taxation deems the crime of tax fraud as being one that harms all citizens. Part of their efforts focuses on promoting awareness. Their campaigns encourage the public to report potential suspicions of fraud involving individuals or businesses. After receiving a complaint, the investigations team promptly takes action.
NJ: False Testimony and Statement Verification
In (54:52-19), violations relating to the State Tax Uniform Procedure Law are addressed. One potential crime that is a fourth-degree offense is making false testimony or statements. This offense is proven by determining that someone swore, affirmed or verified statements of a fraudulent nature committed for avoiding paying a “tax, fee, penalty, or interest.”
NJ: Failure to File a Tax Return
In (54:52-8), the legislature outlines the crime of failing to file a tax return. This is an offense of the third-degree committed by failing to file as required by State tax law. Intent to avoid paying a “tax, fee, penalty, or interest” must be proven. One example is when someone works as an independent contractor and receives income that is reported on a 1099 form but never files a tax return.
NJ: Failure to Pay Tax
In (54:52-9) it is explained that the crime is committed by simply failing to pay any amount owed to the state. It also is necessary to prove that the defendant acted knowingly to evade paying an obligation. If payment was made with a “dishonored negotiable instrument” it is inferred that the defendant had no intention of satisfying the obligation.
NJ: Filing a Fraudulent Return
Filing a tax return that is fraudulent (54:52-10) is a crime of intentionally filing, preparing, or providing assistance with a fraudulent “return, report, statement, or application” according to the State Tax Uniform Procedure Law. This is a crime that is charged as a third-degree offense.
New Jersey Disorderly Person Offenses
New Jersey's categories that are used for grading criminal offenses are distinct from those of most jurisdictions. For example, the majority of states grade offenses as either felonies or misdemeanors and then have several levels further contained within each. The most serious crimes are charged as first-degree offenses in New Jersey. The least serious category is a disorderly person offense--those that are unlikely to result in a jail sentence. Under certain circumstances, acts of relatively minor tax fraud they may be charged in this category including:
- Violates state tax law by failing to file a return
- Fails to pay any amounts owed relating to state taxes
- Is determined to have submitted, filed, or made false statements or testimony relating to State tax law
- A failure to file a required bond according to State tax law
- Demonstrates a failure to file “an application for registration, certification, or such data in connection” as required by State tax law
- Failing to “display or surrender” some certificate of authority as necessary
- Violates State tax law by unlawfully transferring or assigning some certificate of authority
- A failure to charge appropriate tax
- Fails to properly document or account for taxes
- Does not properly withhold required taxes
- A failure to properly maintain records as required by State tax law
Internal Revenue Service (IRS) Federal Tax Crimes
A charge of fraud and false statements applies if a person intentionally provides any “return, statement, or other documents” that is subject to a penalty for perjury. This applies when the individual is aware that the statement is incorrect. It also applies to those who “aid or assist” in these actions.
It is a crime to intentionally conceal, remove, or deposit any items that are subject to taxation. This includes intentionally acting to avoid or prevent any actions to assess or collect taxes. This may involve concealment, suppressing, or destroying some records or other documentation in an effort to avoid taxation. This may be charged federally as a felony offense and an individual may be sentenced to up to three years of incarceration and a fine of up to $100,000.
A person may commit a crime by knowingly submitting a “list, return, account, statement, or other documents” that they are aware is false. The maximum penalties that may be imposed on an individual include one-year of incarceration and a fine of up to $10,000.
Tax-Related Identity Theft
In 2016, the IRS reported there were more than 42,000 fraudulently filed tax returns that totaled more than $220 million. An estimated $180 million in fraudulent returns were detected and effectively prevented. Typically, the crime is committed by filing a tax return under someone else's identity. This generally requires that the perpetrator obtain the victim's social security number and is committed in order to unlawfully receive a tax refund.
The victim may become aware that they are victimized when they file their taxes and are told that they had already been filed for that tax year. Some perpetrators go as far as using an employer's tax identification number to create false W-2 documents in order to execute the crime.
Potential Defenses for Tax Fraud Allegations
Your defense attorney will develop an appropriate strategy of defense based on the specific circumstances of your case. A statute of limitations extends for a six-year period for acts including federal tax evasion. This means that once a six-year period has elapsed, the IRS may not pursue charges. Those bringing allegations, such as those for tax evasion, must prove that the defendant acted knowingly.
Why Seasoned Defense Counsel is Critical
A conviction for tax fraud can result in long-term detrimental consequences. There is the potential for significant fines and a sentence of imprisonment. With experienced legal representation from a criminal defense attorney, you are adding a professional that truly understands this area of practice.
New Jersey Lawyer Defends White Collar Crimes
Clients of the Lento Law Firm quickly recognize that they have chosen their defense counsel wisely. The facts and evidence involved are thoroughly analyzed and a strategic defense plan is employed. For a complimentary case evaluation, contact the office today at (888) 535-3686.
