Will I Go to Jail for Tax Evasion in Texas?

tax forms, pen, calculator, "taxes" paper

For many, tax season is dreaded. This is an overwhelming and complex process, and you may feel like one mistake can have the Internal Revenue Service (IRS) knocking down your door. However, some people purposely manipulate their taxes to pay less than they owe to the government. Known as tax evasion, many underestimate how severe the penalties for this offense can be. If you’re facing charges, whether for personal or business taxes, you’ll want to connect with a Houston white-collar crimes defense attorney as soon as possible. Continue reading to learn more about these charges and the potential penalties.

What Is Tax Evasion?

While many assume tax evasion occurs when someone purposely does not file their taxes, this is not the only instance. Generally, when someone purposely manipulates or falsifies their documents to reduce how much they owe the government, they are committing tax evasion.

Texas is one of seven states that does not collect personal income tax, meaning a majority of evasion comes from business. For example, a business may falsify its records to show it earned a smaller revenue than it did, so it can keep more of its funds.

Many assume their actions fall under tax avoidance, which is a perfectly legal method of reducing your taxes, often possible through a thorough understanding of the tax code. Generally, smart planning through deductions and credits is encouraged to help filers reduce what they owe. However, it’s important to understand that this differs significantly from purposely manipulating documents or falsifying records to pay less than what is owed.

What Are the Penalties for This Offense?

Many are unaware that tax evasion is a federal offense. This is because taxes are overseen by the IRS, a federal office. Per the tax code, this federal crime can be charged as a misdemeanor or felony offense, depending on the circumstances and how much is owed.

If you are intentionally found to commit tax evasion, you can face the following consequences:

  • For amounts less than $1,500, you will face a misdemeanor
  • For amounts between $1,500 and $20,000, you will be charged with a state jail felony. This carries at least 180 days in jail
  • If you owe between $20,000 and $100,000 this is a third-degree felony, warranting between two and ten years in prison.
  • When you owe between $100,000 and $200,000, you face a second-degree felony offense, increasing the penalty to two to twenty years in prison.
  • Owing the IRS more than $200,000 is a first-degree felony, resulting in five to ninety-nine years in prison

As you can see, the penalties for this offense can be intense. While many people do purposely and maliciously manipulate their taxes, if this is an error, the idea of facing criminal charges over an honest mistake can be incredibly overwhelming.

Regardless of your circumstances, the team at the Gonzalez Law Group has the experience you need to fight for you. If you’re facing charges, connect with us today to learn how we can help you navigate these complex matters. When you’re in legal trouble, contact us to request a free case consultation.